C A L I F O R N I A H I G H - S P E E D R A I L A U T H O R I T Y

R e p o r t t o t h e L E G I S L A T U R E

2 0 0 9

D E C E M B E R
Introduction / Purpose

Executive Summary

The Project and Its History

The High-Speed Rail Authority

From Today to Passenger Service

Outreach

Ridership, Revenue, and Operations

Cost of the System

Paying for the System

Economy / Climate Right Now

Subsequent Sections

Risks and Mitigation

Oversight

Conclusion

AB 4x1 Checklist

Table of Contents

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D E C E M B E R 2 0 0 9

1

The California high-speed train will dramatically change the 

face of our state – from our economy to our environment, 

to the communities the system passes through and the way 

we are viewed around the world. It will create jobs, spur the 

development of more livable and sustainable communities, help 

achieve our state’s historic greenhouse gas reduction goals, and 

reinvent Californians’ perception of the time and distance across 

our great state. 

Today is an exciting time for high-speed rail development, as 

interest in the transportation option builds around the globe, 

and as the President of the United States pursues a vision of 

transportation in America in which high-speed trains play a 

leading role. 

Over the course of the past year, a number of events have 

transformed California’s high-speed train project from simply an 

idea into a viable infrastructure project. As such, the California 

High-speed Rail Authority is also evolving from an entity focused 

solely on planning a high-speed train project to one that must 

also build it.

Just over a year ago, the people of California said clearly1 that 

they want a high-speed train system – a new transportation 

option – when they voted in favor of Proposition 1A. And 

interest in California’s project – which has been in planning for 

some 13 years – has now reached an unprecedented level. 

For these reasons, the Legislature rightly included in the 2009-

10 State Budget language requiring the California High-Speed 

Rail Authority to submit a business plan document by Dec. 15, 

2009. Subsequent legislation additionally was passed by the 

Legislature and signed by Governor Schwarzenegger requiring 

the Authority to submit a revised business plan every two years2. 

This document satisfies the requirement of the Budget Act of 

20093 and lays out the path forward for California’s high-speed 

rail project. 

Introduction / Purpose

1 Secretary of State, Statement of Vote, November 2008 General Election, Proposition 1A, 

the Safe, Reliable High-Speed Train Bond Act

2 Assembly Bill 783 (Ashburn), Chaptered Oct. 11,2009

3 Assembly Bill 4x1, revisions to the Budget Act of 2009, SEC. 148. Item 2665-004-6043 of Section 2.00
D E C E M B E R 2 0 0 9

2

Inspired by successes of high-speed train systems around the 

world, California has for more than 13 years been planning a 

statewide high-speed rail line that will serve as a backbone 

and a needed alternative to the state’s existing transportation 

network. Stretching initially from Anaheim/Los Angeles through 

the Central Valley to San Francisco, and later to Sacramento and 

San Diego, it will be capable of a 220 mph operating speed and 

a travel time between Los Angeles and San Francisco of under 

2 hours 40 minutes. It will interconnect with other modes of 

transportation and provide an alternative, more environmentally 

friendly option to vehicle and air travel. 

The California High-Speed Rail Authority is the state entity 

charged with planning, designing, building, and operating 

the planned system. To date, the Authority has existed largely 

as a planning organization, staffed by a small number of state 

employees, relying largely on contract services, and governed by 

a nine-member board of directors. However, now the Authority 

must transform into an implementation entity responsible for 

what will be the largest public works infrastructure project in 

state history. 

A project of this magnitude will have a significant impact on 

our economy, in both the short and long terms, and will provide 

the job creation and stimulus our state needs in this difficult 

economic time. Construction startup by 2012 is expected to 

generate 600,000 jobs (one-year, full-time equivalents over 

approximately 8 years) and kick-start economic activity in 

design, construction and supply services. 

The path from where California’s high-speed train project stands 

today to initial revenue passenger service can be divided into 

three categories of major milestones: planning, implementation, 

and revenue service. This document describes the process, 

shows where the project is currently, and discusses the plan to 

achieve initial high-speed train service. An ideal timeline shows 

full, Anaheim/Los Angeles to San Francisco high-speed train 

service by 2020, with smaller sections opening for limited or 

shared-use service prior to that time. 

Between today and passenger service, it is essential that the 

Authority conduct effective and thorough outreach to inform 

Californians about the project and its progress. Effective 

outreach is integral to achieving the goals of the high-speed 

train project, and it is incumbent upon the Authority to 

effectively engage the public in its mission to be transparent 

and accountable to the people of California. Already, the 

Authority is putting in place a plan to augment and improve its 

Executive Summary

On Track to Create Jobs, Stimulate Our Economy, Improve California’s 

Mobility, and Support the President’s Vision
3

outreach efforts, and between today and the 

commencement of construction, there will be 

ample and significant opportunities for public 

input and interaction. 

Another stage in the lead up to construction 

is to refine ridership and revenue estimates. 

The ridership of a high-speed train system, the 

revenue it brings in, and its operations costs are 

all interconnected. Balancing the three elements 

determines the viability of the system as a 

business enterprise. This document describes 

the Authority’s current ridership, revenues, and 

operations costs estimates, and the steps we are 

taking to further improve those numbers. 

This document also updates the projected cost 

of building the system, describing for the first 

time the construction costs in terms of the 

year the dollars will be expended rather than 

today’s current dollars. Previously, the cost of 

the project had been described in terms of the 

current year. However, the federal government, 

through the American Recovery and 

Reinvestment Act application process, required 

the description of a project’s cost to be made 

in year-of-expenditure dollars; additionally, to 

talk about the Proposition 1A bond dollars is to 

talk in year-of-expenditure terms, as that dollar 

amount is not indexed to inflation and will 

remain static, at $9 billion available to the highspeed train project, whether it is expended in 

2008, 2018, or even further into the future. This 

is a more credible manner by which to estimate 

the cost of the high-speed train project, as 

California clearly is not constructing the system 

today but will instead be constructing it over 

a period of time between 2012 and 2020. The 

updated cost estimate for the San Francisco-toAnaheim initial high-speed rail system is $42.6 

billion in year-of-expenditure dollars – the bulk 

of which is due to inflationary costs.

A plan for financing that project cost is 

included in this document. Bolstered by 

the unanticipated American Recovery and 

Reinvestment Act, the state bond dollars 

approved by California voters, and a new 

President publicly eager to help build highspeed rail networks in this country, the financial 

plan lays out a realistic scenario for paying for 

the system with a combination of state, federal, 

local, and private funds. 

Never before has there been more interest 

and more momentum behind building a highspeed train system in the United States. Already 

in California, the Authority has experienced 

tremendous amounts of interest from private 

companies who work with train technology 

as well as construction, in addition to intense 

interest from foreign governments and 

consortiums with experience building and 

operating high-speed train systems overseas. 

The Authority has executed cooperative 

information-sharing agreements with a number 

of countries. 

But of course there are risks to a project of 

this size, scope and nature – risks that could 

jeopardize the project’s completion. Any frank 

discussion of the project and its planning must 

include these risks, and any credible plan for the 

project must address how these risks would be 

mitigated. This document does that. 

Additionally, this document outlines the 

unprecedented amount of oversight – the 

comprehensive system of external controls, 

oversight and review – guiding the Authority’s 

work. The uniqueness and enormity of the 

project make this scrutiny appropriate and 

provide greater assurance that the public’s 

interest will be protected and that the project’s 

success will be realized.

In summary, California’s high-speed train 

project is on track and being pushed along by 

tremendous momentum from our partners in 

government, the private sector, and the people 

of our state who know that its construction 

will mean jobs and economic stimulus and its 

completion will mean a more mobile, vibrant, 

environmentally friendly, and interconnected 

California. 
D E C E M B E R 2 0 0 9

4

The Project

California’s high-speed rail project is a planned transportation 

backbone whose initial 500 miles will begin in Anaheim/Los 

Angeles, run through the Central Valley from Bakersfield to 

Merced, then head northwest into the Bay Area. It will travel 

up to 220 miles per hour and be able to make its journey from 

Los Angeles to San Francisco in under 2 hours and 40 minutes. 

Subsequent phases of the high-speed rail system are planned 

for a southern extension from Los Angeles to San Diego via 

the Inland Empire and an extension from Merced north to 

Sacramento. 

The project’s goal is to increase and maintain California’s 

mobility, which is vital to our economy’s health, as our 

population grows by a third – from 38 million today to a 

projected 50 million by 2035. 

The project will employ train technologies like those used in 

other countries with established high-speed train systems (for 

example: Japan, France, Germany, Great Britain, Spain, Korea and 

China). That means steel-wheel-on-steel-rail technology, entirely 

electric power, state-of-the-art safety and signaling systems, and 

automated train control. This is not new technology – only new 

to North America. It was introduced in Japan in 1964, France in 

1981, and in many other countries within the past two decades. 

The Project and Its History

Inspired by successes of highspeed train systems around the 

world, California has for more 

than 13 years been planning a 

statewide high-speed rail line that 

will serve as a backbone and a 

needed alternative to the state’s 

existing transportation network. 

It is envisioned as a new system 

stretching initially from Anaheim/

Los Angeles through the Central 

Valley to San Francisco, and later to 

Sacramento and San Diego. It will 

be capable of 220 mph operating 

speed and a travel time between 

Los Angeles and San Francisco of 

under 2 hours 40 minutes. It will 

interconnect with other modes 

of transportation and provide 

an alternative, environmentally 

friendly option to vehicle and 

air travel. Today, the system is 

more than a vision; it is a reality 

California is working toward with 

the support of the state’s voters, 

labor, environmental, and business 

advocates, and the strong support 

of the governor and the President 

of the United States. 
5

PHASE 1 OF PLANNED HIGH-SPEED RAIL SYSTEM

(Note: These two maps represent the 

work that has been conducted in the 

time between the submission of the 2008 

Business Plan to the Legislature and Dec. 

1, 2009. Subsequent to that date, the 

High-Speed Rail Authority took action 

that affects the Bay Area to Central Valley 

portion of the planned system and the 

related Program-Level EIR4

. Also note 

that the dots on these maps represent 

station locations and optional station 

locations; the total number of stations 

on the system will not exceed 24, per 

Proposition 1A.)

4 See “Town of Atherton Lawsuit & the High-Speed Rail Line” in the following section within this chapter.

PLANNED SUBSEQUENT HIGH-SPEED RAIL SECTIONS

 The system will interface with 

and complement other modes of 

transportation – commercial airports, 

mass transit, the state’s highway 

network, as well as bike paths and 

foot traffic. The system will be capable 

of many patterns of service and will 

compete – as it has in other countries 

– with air and automobile travel over 

medium distances. 

The California high-speed train will 

operate primarily on exclusive track 

with portions of the route shared 

with other existing passenger 

rail operations. The route will be 

constructed at-grade, in an open 

trench, in a tunnel, or on an elevated 

guideway, depending on the terrain, 
6

physical constraints, environmental impacts 

and community input along sections of the line. 

Extensive portions of the system will lie within, 

or adjacent to, existing rail or highway rightof-way (rather than new alignment) to reduce 

potential environmental impacts and minimize 

land acquisition.

It is a project supported by California’s voters, 

its congressional delegation, environmental 

advocates, labor and business groups, and 

the President of the United States, as well as 

transportation planners, who know that highspeed train technology has proven to be the 

safest and most reliable form of transportation. 

History

Inspired by the successes of high-speed 

train systems in Asia and Europe, the state 

of California has for decades pondered the 

possibility of a high-speed passenger rail system 

in the Golden State. 

It first pursued the idea of a Southern California 

high-speed corridor working with Japanese 

partners in 1981, under Governor Jerry Brown. 

Lynn Schenk5 , who was at that time the 

Secretary of the state Business, Transportation 

and Housing Agency, went on to represent 

California in the U.S. Congress, where she wrote 

the bill creating the first five high-speed rail 

planning corridors in the country, including 

California’s, and introduced the “High-Speed Rail 

Development Act of 1994,” which was signed 

into law that year by President Clinton. 

In the mid-1990s, as it became clear that 

California’s increasing population was 

putting a strain on its highways, airports, and 

conventional passenger rail lines, investigation 

of the potential for a high-speed rail system 

began in earnest. Legislative Joint Resolution 

by then-Senator Quentin Kopp was adopted 

in 1993 and created the Intercity High-Speed 

Rail Commission, charged with the task of 

determining the feasibility of an intercity highspeed rail system in California. Working through 

the Business, Transportation and Housing 

Agency, the commission in September 1996 

issued its “High-Speed Rail Summary Report 

and Action Plan,” which concluded that such a 

project was indeed feasible. 

Subsequently, that same year, the California 

High-Speed Rail Authority was created by the 

Legislature and Governor Pete Wilson. The 

Authority was tasked with preparing a plan and 

design for the construction of an economically 

viable high-speed train line linking major 

metropolitan areas that would help sustain 

the state’s long-term mobility and economic 

growth.

Following release of the Authority’s first 

business plan in 2000, the Legislature passed 

and Governor Gray Davis signed SB 1856 

by then-state Senator Jim Costa in 2002 

authorizing a $9.95 billion bond issue to finance 

a new high-speed train system in California. 

Submission of the measure to the state’s voters 

was delayed several years by the Legislature as 

part of the state’s budget process.

In 2004, the Authority together with its federal 

partner, the Federal Railroad Administration 

(FRA), issued a Draft Program-Level 

Environmental Impact Report/Environmental 

Impact Statement (EIR/EIS) (two volumes 

and 64 technical reports) that sought to 

describe the proposed system and describe its 

environmental impacts on a statewide scale. 

Through the public environmental review 

process, the Authority received and reviewed 

over 2,000 public and government agency 

comments on the draft document, which 

was used to determine preferred corridors 

and stations for the majority of the proposed 

line. The program-level EIR/EIS was certified 

in 2005. An additional program-level EIR/EIS 

was certified in 2008 that examined the path 

between the Central Valley and the Bay Area.

5 See Schenk biography in following section, “The High-Speed Rail Authority.”
7

Town of Atherton Lawsuit & the High-Speed Rail Line

In August 2008, a group of petitioners filed a lawsuit in Sacramento County Superior Court 

claiming the Authority’s Final Bay Area to Central Valley Program EIR violated the California 

Environmental Quality Act (CEQA) in numerous ways. (Town of Atherton, et al., v. California 

High-Speed Rail Authority, et al., Sacramento Superior Court Case No. 34-2008-80000022.) 

The Program EIR examined network alternatives for connecting the High-Speed Train system 

between the San Francisco Bay area and the Central Valley, particularly network alternatives 

involving the Altamont Pass and the Pacheco Pass.

In August 2009, the court issued a ruling upholding the Authority’s program EIR in most respects. 

The court did, however, indicate the program EIR required revision and recirculation in the 

following areas to comply with CEQA:

•	 description of the alignment of HST tracks between San Jose and Gilroy;

•	 impacts to surrounding businesses and residences, the Monterey Highway, and Union 

Pacific freight operations between San Jose and Gilroy; and

•	 land-use impacts associated with Union Pacific’s denial of the use of its right-of-way. 

The court also found that the Authority’s CEQA finding on vibration impacts was not supported 

by substantial evidence. A final judgment was entered on November 3, 2009, and a peremptory 

writ of mandate issued.

On December 3, 2009, the Authority approved resolution #HSRA 10-0146 , as the first step in 

complying with the court judgment. This action rescinds the Authority’s 2008 certification of 

the program EIR and related approvals. The Authority directed staff to prepare the necessary 

revisions to the program EIR and circulate them in accordance with CEQA for public comment. 

The Authority will consider the revised program EIR and the entire record of material before 

making a new decision to certify the revised final program EIR. The Authority will also make a 

new decision on a network alternative, preferred alignments, and preferred station locations for 

further study in project EIRs.

The Authority has begun the more specific, 

project-level environmental reviews for 

individual sections of the system in order to 

better manage the environmental review 

process. That is the stage the Authority is 

currently engaged in as of the submission of this 

Business Plan, along with the additional work 

on the Bay Area to Central Valley Program EIR to 

address issues cited by the court and discussed 

elsewhere in this report7

. 

In 2008, the state Legislature approved and 

Governor Arnold Schwarzenegger signed 

Assembly Bill 3034 (Galgiani), which revised 

Senator Costa’s SB 1856 of 2002, finally 

putting the $9.95 billion bond measure on the 

November 2008 ballot – $9 billion of which was 

targeted as partial financing of a high-speed 

rail system. Proposition 1A, as it was named on 

the ballot, was approved with 52.7 percent8 

of the vote. It became the country’s first-ever 

voter-approved multibillion-dollar financing 

mechanism for high-speed rail.

Then, in 2009, newly elected U.S. President 

Barack Obama included $8 billion in 

funding within the American Recovery and 

Reinvestment Act (ARRA) to be directed to highspeed train projects throughout the country. 

Along with that inclusion, he set out a Vision of 

High-Speed Rail in America9

 that envisions a 

comprehensive high-speed intercity passenger 

rail network through a long-term commitment 

at both the federal and state levels. 

6 http://www.cahighspeedrail.ca.gov/images/chsr/20091201141348_Agenda_Item_3_-_Resolution_HSRA10-012.pdf 

7 On December 3, 2009, in order to comply with a Superior Court ruling, the California High-Speed Rail Authority Board voted to rescind the resolution certifying 

the 2008 EIR, and the Authority is pursuing additional studies prior to bringing the document back before the Board for consideration or recertification.

8 California Secretary of State’s Office, Statement of Vote, 2008 General Election, http://www.sos.ca.gov/elections/sov/2008_general/57_65_ballot_measures.pdf 

9 Obama Administration, U.S. Department of Transportation, Federal Railroad Administration, Vision of High-Speed Rail in America
8

As of the submission of this Business Plan, 

California stands to receive billions of dollars 

from the ARRA for the construction of highspeed rail. It has requested, through the 

Governor, nearly $6 billion from that $8 billion 

pot, $4.7 billion of which was requested 

specifically for the high-speed train project. 

Guidance issued for ARRA funding, which may 

be announced as early as January 2010, sets 

a deadline of September 2012 to obligate the 

federal monies – meaning go to construction. 

10 Budgeted

Project Expenditure History

Over the course of its 13-year history, the Authority’s budget has varied and has come from a variety 

of funds, including those from regional partner transportation agencies. Below is a chart showing the 

Authority’s funding since its inception, the sources of those funds, and the activities on which they 

were expended
D E C E M B E R 2 0 0 9

9

Established in 1996 by state legislation, the California HighSpeed Rail Authority (Authority) is the state entity responsible 

for planning, constructing, and operating a high-speed train 

system serving California’s major metropolitan areas. 

Per state law setting up the Authority, it is governed by a ninemember policy board. The Board members are appointed by 

the governor and the Legislature – five members appointed 

by the governor, two by the state Senate, and two by the state 

Assembly. 

To date, the California HighSpeed Rail Authority has been a 

planning organization, staffed by 

a small number of state employees, 

relying largely on contract services, 

and governed by a nine-member 

board of directors. However, now 

the Authority must transform 

into an implementation entity 

responsible for what will be the 

largest public works infrastructure 

project in state history. This section 

describes the current organization 

and the steps necessary to grow 

it into a state entity overseeing 

construction of the state’s highspeed train system.

The High-Speed Rail Authority

The High-Speed Rail Authority Organization
10

Board Members

Chairperson: Curt Pringle

Anaheim Mayor Curt Pringle was appointed to the High-Speed Rail 

Authority in 2007 by Governor Schwarzenegger and his term expires 

Dec. 31, 2010. He currently serves as Mayor of the City of Anaheim 

and president of Curt Pringle & Associates. Pringle has also served as 

an adjunct faculty member in the political science department at the 

University of California, Irvine since 2000, where he teaches California 

government. Previously, he served in the California State Assembly 

from 1988 to 1990 and 1992 to 1998. While in the Assembly, Pringle 

served as Speaker in 1996. His term on the High-Speed Rail Authority 

Board expires December 31, 2010.

Vice Chairperson: Tom Umberg

Thomas J. Umberg is an attorney with Manatt, Phelps & Phillips, LLP. 

In 1995 Umberg was an Assistant U.S. Attorney in Los Angeles and 

Orange County. In 1997 Umberg was nominated by the President 

and unanimously confirmed by the United States Senate as Deputy 

Director of the White House Office of National Drug Control Policy 

(ONDCP). Umberg served three terms in the California Legislature, 

most recently between 2004 and 2006. He serves as a colonel in the 

U.S. Army Reserve, and is currently on active duty in Afghanistan, 

where he participates in monthly Authority Board meetings by 

telephone. His term on the High-Speed Rail Authority Board expires 

December 31, 2011.

Board Members:

David Crane, of San Francisco, has served on the Board of the 

High- Speed Rail Authority since 2007, having been appointed by 

Governor Schwarzenegger. He currently serves as special advisor 

to the governor for jobs and economic growth. Before joining 

the Administration, Crane was a partner with Babcock & Brown, a 

financial services firm. His term on the High-Speed Rail Authority 

Board expires December 31, 2012.

Rod Diridon, Sr., of Santa Clara is a Governor’s Office appointee to 

the Board. He has served on the Authority since 2001, serving two 

terms as chair. Additionally, Diridon serves as the executive director 

of the Mineta Transportation Institute. Previously, he served on 

the Santa Clara County Board of Supervisors from 1975 to 1995 

and served as chair of the Board for six terms. Diridon is past chair 

of the Metropolitan Transportation Commission, American Public 

Transit Association, Bay Area Air Quality Management District and 

the Association of Bay Area Governments. He is the president and 

founder of the California Trolley and Railroad Corporation. His term 

on the High-Speed Rail Authority Board expires December 31, 2009. 
11

Richard Katz, of Sherman Oaks, is the owner of a public policy 

and government relations firm based in Los Angeles, Richard 

Katz Consulting, Inc. Katz was California’s lead negotiator for 

the landmark Colorado River Agreement between the State of 

California, the Federal Government, four California Water Agencies, 

and the six Colorado River Basin States. Shortly after his election in 

June of 2005, Los Angeles Mayor Antonio Villaraigosa appointed 

Katz to serve with him on the Governing Board of the Metropolitan 

Transportation Authority. In September 2008, following the tragic 

Metrolink crash, Mayor Villaraigosa appointed him to the Metrolink 

board in order to lead the effort to right the agency. Governor 

Davis appointed Katz as his Senior Advisor on Energy and Water 

issues in 2001. Also in 2001, Katz was appointed to the State Water 

Resources Control Board. Confirmed by the Senate, he served for 

five years, occupying the water quality seat on the State Board. Katz 

was first elected to the California State Assembly in 1980, serving 

continuously for 16 years, 10 of which were as Chair of the Assembly 

Transportation Committee. Katz’ term on the High-Speed Rail 

Authority Board expires December 31, 2011.

Lynn Schenk is an attorney and senior corporate advisor who 

served as Chief of Staff to California Governor Gray Davis from 1999 

to 2003. In 1992 she became the first woman elected to the United 

States House of Representatives to represent the San Diego area. 

From 1978 to 1983, Ms. Schenk served in the Cabinet of Governor 

Jerry Brown as California’s Secretary of Business, Transportation and 

Housing (the first woman to hold this Cabinet post). Prior to her 

state Cabinet appointment, Ms. Schenk served as a Deputy Attorney 

General in the criminal division of the California Attorney General’s 

office, followed by several years as an in-house lawyer to the San 

Diego Gas & Electric Company. In 1976, she was appointed a White 

House Fellow by President Ford serving as a special assistant to VicePresidents Nelson Rockefeller and Walter Mondale. A gubernatorial 

appointee to the High-Speed Rail Authority Board, her term expired 

in December 2004. 

Fran Florez is a former City Council member and Mayor of the city 

of Shafter. Florez, who retired from the banking industry after 35 

years, is one of the principals of Florez & Florez consulting firm 

and has contracted her services exclusively to Pacific Gas and 

Electric Company’s Public Affairs Department. She served as Board 

chairperson from September 2005 until September 2006. Her term 

on the High-Speed Rail Authority Board expires December 31, 2012.
12

The Honorable Judge Quentin L. Kopp was appointed to the 

San Mateo Superior Court on January 1, 1999, by Governor Pete 

Wilson. Judge Kopp retired effective January 31, 2004, but was 

immediately accepted in the Assigned Judges Program of the 

California Judicial Council. On June 13, 2006, the state Senate 

appointed him to the California High-Speed Rail Authority. He 

served in the California State Senate from December 1, 1986, until 

December 7, 1998, and as a member of the City and County of 

San Francisco Board of Supervisors to which he was first elected in 

November 1971, and re-elected four times thereafter. Judge Kopp 

served as an ex-officio member of the California Transportation 

Commission from 1988 until 1998, as a member of the California 

Law Revision Commission from 1995 until 1998, and a member of 

the Little Hoover Commission from 1996 until 1998. As an elected 

local and state legislator for 27 years, Judge Kopp also served as 

a leader on virtually every regional governmental policy-making 

body affecting the Bay Area. His term on the High-Speed Rail 

Authority Board expires December 31, 2010.

Russ Burns is business manager of Operating Engineers Local 3, 

and was appointed to the Authority board by Assembly Speaker 

Karen Bass. He previously served on the Cal-OSHA Standards 

Board Subcommittee for Certification of Crane Operators. A thirdgeneration operating engineer and Local 3 member, Burns started 

his career as a crane operator on a variety of high rises, bridges, 

refineries and large treatment plants throughout Northern 

California and Reno, NV. He joined the Local 3 staff in 1994. Burns 

was recently re-appointed to the Authority and his term expires 

December 31, 2013. 

The Authority is staffed by a small number of 

state employees charged with oversight of the 

effort to build the high-speed train system in 

California. It currently has state budget authority 

for 11.5 personnel-year-equivalents (PYs). 

However, due largely to major events over the 

past 13 months, it is now required that the 

Authority’s organization change and grow.

• Additional state staff is needed to oversee 

and administer the federal and state 

bond dollars that are soon to be in hand, 

and additional staff is needed to increase 

public outreach and ensure adequate risk 

management over increasing amounts 

of work being conducted by contractors. 

A plan is already in place to augment the 

Authority’s staff, and is laid out below.

• The Authority Board has a need to 

become more engaged in the project’s 

details and progress. That transition is 

already taking place under newly elected 

Chairman Pringle. 
13

• The contract Program Management 

Team must prepare to transition from a 

planning and environmental review phase 

to a construction phase. A plan for such a 

transition is laid out below. 

Adjusting the Authority’s organization to 

properly suit the project ahead of it will require 

the partnership and cooperation of several 

entities, including the Department of Finance, 

the Legislature, and the Governor’s Office. 

The Authority’s staff organization currently 

consists of an Executive Director (Mehdi 

Morshed11), three Deputy Directors (Finance 

and Administration, Environmental and 

Planning, and Communications, Public 

Policy and Outreach), a small support staff, 

as well as a Chief Engineer contractor, a 

Project Management Oversight Management 

contractor, Government Relations Management 

contractor, a Program Management Team, 

and Regional Project Management Teams. 

Additionally, the Authority employs a financial 

consultant contractor and a public outreach 

and communications contractor. The California 

Attorney General’s office provides legal support 

to the Authority on all matters including review 

of the environmental deliverables up to and 

including the Final Environmental Report (EIR) 

and the Notice of Determination (NOD). The 

current overall project organization is illustrated 

on the following chart. 

The California high-speed train system is 

also sponsored by the Federal Railroad 

Administration (FRA). The FRA is the federal lead 

agency under the National Environmental Policy 

Act (NEPA) responsible for technical and legal 

review of the regional project Environmental 

Impact Statements (EISs). All environmental 

deliverables up to and including the Final EIS 

and Record of Decision (ROD) will be subject 

to FRA approval. Likewise, the Authority is the 

state lead agency responsible for preparation 

and certification of the regional project 

Environmental Impact Reports (EIRs) required 

under the California Environmental Quality Act 

(CEQA).

11 Morshed was the first person appointed to the High-Speed Rail Authority when it was created in1996. 

His biography can be read here: http://www.cahighspeedrail.ca.gov/about/mehdi-morshed.htm.
14

Over the past 10 years the 

Authority’s limited staff 

members have managed 

to oversee all the activities 

related to the planning and 

environmental work for a state 

high-speed train. During those 

years the Authority’s budget 

has varied from $1.5 million to 

nearly $140 million annually, 

while the number of full-timeequivalent state positions (PYs) 

has grown only from 5 to 11.5 

(see chart to right).

FY Total Budget PYs Notes

1997/98 1,500,000 3

1998/99 3,000,000 4.5

1999/00 3,032,000 5

2000/01 6,026,000 4.5

2001/02 4,038,000 4

2002/03 7,928,000 4

2003/04 3,802,000 4

2004/05 1,151,000 3.5

2005/06 3,646,000 3.5

2006/07 14,553,000 6.5

2007/08 20,694,000 6.5

2008/09 44,231,000 9.5

2009/10 139,180,000 11.5 8.5PYs currently filled

Total	 252,781,000

With the passage of the $9.95 billion bond measure last 

November, the mission and the objective of the Authority, its 

staff, and its contractors changed significantly. The promise 

of federal American Recovery and Reinvestment Act (ARRA) 

funds additionally has changed the Authority’s mandate. 

Put simply, the Authority is now building a high-speed train 

system, not just building the hopes of one. Instead of the 

gradual and intermittent planning and environmental studies 

to match limited funds, the Authority must now proceed toward 

construction and operation and do it as quickly as possible. 

That means the Authority staff must be augmented to properly 

direct and oversee the work of its contractors moving forward in 

a manner that will preserve the intent of the project and protect 

public funds. 

To systematically determine the personnel demand for the 

future activities, the Authority entered into a contract with 

the firm of KPMG to evaluate the current activities, the future 

needs, and the kind of organization and personnel that are 

necessary to carry out the required work. The KPMG report12 is 

a good guideline on the kind of organizational structure that 

is necessary to implement the mission and objectives of the 

Legislature and the governor who placed the proposal before 

the voters, the voters who approved it, and the Authority. The 

recommendations of that report – currently being acted on by 

the Authority – are discussed in the following section. 

The Authority

12 Available at the High-Speed Rail Authority’s Web site, at this URL: http://www.cahighspeedrail.ca.gov/images/

chsr/20091103104811_11-05-09_Agenda_Item_11_attachment_to_Committee_Mtg_Item_2.pdf
15

Today’s Organization

CURRENT STATE EMPLOYEE STAFF
16

Because of the lack of budget authority to hire additional staff, many key functions are currently 

being performed by contractors. Those functions include: oversight of the Program Management 

Team (contractor T.Y. Linn being brought on in December 2009); legal services (provided by the state 

Attorney General’s Office and Nossaman LLC lawfirm); fiscal services (through the Department of 

General Services); personnel services (through Caltrans); legislative affairs (contractor); chief engineer 

(contractor); IT services (provided by contractor Paperless Knowledge); and regional director roles 

(two regional directors provided through joint agreements with Caltrans in the Central Valley and 

Caltrain in the Bay Area).

Moving Forward

As the California high-speed train project moves toward construction, the Authority’s state staff must 

be augmented in order to ensure governance and decision-making in the public interest, as well as 

accountability and transparency. 

The study conducted by KPMG and the resulting report provide a basis for necessary adjustments 

to the Authority’s staff. With the input and approval of the Authority’s Board, the Authority will 

immediately begin working to augment its staff.

The report pointed to the need to either create 

or bring in-house several key positions: 

•	 A “Chief Executive Officer” to lead the 

Authority in achieving its new mission

– Establishing a Chief Executive Officer 

position at the helm of the Authority 

will convey to the public, policy-makers, 

industry, and the markets that the 

Authority “means business” as it embraces 

this new phase

– The CEO title is more widely used in 

certain local government and non-profit 

organizations, especially those that 

operate utilities or other “enterprises” 

that must attract and retain users in order 

to generate revenues, much like private 

businesses

•	 An experienced, in-house “Chief 

Program Manager”

– The position is more than a “Chief 

Engineer” – encompassing responsibility 

for the Project life cycle, from planning 

and environmental, design and 

construction, to implementation and 

operation

•	 An experienced, in-house “Chief 

Financial Officer”

– The Authority needs a highly-credible 

financial specialist for driving funding 

strategies and communicating with policy 

makers and the markets

•	 A dedicated office for “Project Controls 

and Risk Management” (including 

quality assurance and health and safety)

– Importance of these functions warrants 

a direct line to the Chief Executive Officer

•	 “General Counsel”

•	 “Regional Directors”

 – There is a need for additional regional 

directors, and the existing regional 

directors ought to be brought in-house

•	 “Internal Auditor”

Additional senior positions also are needed to 

perform mission critical functions, including 

both existing and new positions:

•	 Director, Legislation

•	 Director, Engineering and 

Programming

•	 Director, Business and Procurement 

Services
17

PROPOSED FUTURE STATE STAFF ORGANIZATION
18

Next Steps

In order to begin implementing these staffing 

changes, the Authority needs to initiate a 

number of important and time-sensitive actions, 

including:

•	 Secure support from the Administration, 

Legislature, and key stakeholders for the 

Authority’s desired staffing, organizational 

structure, and timing. This should include 

the necessary legislative and executive 

actions to provide the Authority with 

additional exempt entitlements to 

facilitate the hiring of quality individuals 

from either inside or outside of state 

service at competitive salaries.

•	 Carefully manage the recruitment effort 

to attract world-class talent. This may 

include engaging a qualified search firm(s) 

or human resources consultant(s) to refine 

position parameters, identify appropriate 

classifications, and assess the competitive 

landscape, before establishing positions 

or commencing recruitment.

A Focus on Contracting

Rationale

It is a policy of the Authority’s Board that the 

Authority rely on a relatively small core staff 

of state employees and employ contractors 

for the bulk of the project work. This policy 

marries well with a project of this nature, which 

requires highly specialized personnel for only 

short periods of time. For example, the project 

is currently in the environmental review phase, 

and therefore needs engineers and planners 

knowledgeable about state and federal 

environmental review processes. However, this 

phase of the project will be complete within 

the next couple of years, and those personnel 

and specific skills will no longer be needed by 

the Authority. So, it makes more fiscal sense to 

employ these personnel as contractors rather 

than establishing state employee positions that 

are finite in nature. 

Using contractors also allows the Authority to 

quickly augment or reduce its staff as necessary. 

The alternative would be a rigid and slow state 

hiring process. 

Recently, a reliance on contractors has assisted 

the Authority in maintaining its work schedule, 

as contract personnel are not subject to the 

governor-ordered three-days-per-month 

furloughs. 

Contracts

The following is a summary of the scope 

of work, overall budget, and terms of all of 

the Authority’s major contracts. All of the 

contractors, with the exception of the legal 

services contract, prepare and deliver an annual 

work program which is due to the Authority 

staff in early Spring. The annual work programs 

include a scope of work, list of deliverables, 

schedule, and budget which Authority staff 

review, comment and negotiate prior to the 

start of the fiscal year. Each contractor is 

provided a notice to proceed based on the 

negotiated annual work program immediately 

after the enactment of the state budget.

Program Management Contract

Contractor Name: 

Parsons Brinckerhoff Quade & Douglas

Agreement Total: $199,000,000.00

Term: 11/20/2006 – 06/30/2013

The Program Management Team (led by 

Parsons Brinckerhoff) is providing day-today management of the program, working 

closely with the Authority staff and directing 

the work of other consultants. The work of 

Parsons Brinckerhoff (PB) includes development 

of project controls, design and engineering 

criteria, system specifications, environmental 

methodologies, working with the Federal 

Railroad Administration on compliance issues, 

as well as working with state and federal 

resource agencies in order to successfully obtain 

environmental clearances and permits. PB is 
19

responsible for the development of a project 

implementation strategy and master plan, the 

launch and management of the project level 

environment work through a series of regional 

consultants, development of a right-of-way 

assessment and acquisition program, and the 

management of procurement, final design and 

construction, testing and commissioning, and 

revenue start-up activities. PB will establish 

the systems necessary to maintain control 

of the schedule, budget, documentation, 

procurement, construction contracting 

strategies, etc. so that project delivery tracks the 

established schedule and financial targets.

The work of the Program Management Team is 

discussed in more detail in a section later in this 

document. 

Regional Contracts

Each regional contractor is responsible for 

developing engineering (15 percent - 30 

percent), planning, and environmental data; 

for preparing one or more project site specific 

Environmental Impact Report/Environmental 

Impact Statement (EIR/EIS) for the high-speed 

train system in their respective corridors; 

and for providing the described right-of-way 

preservation and acquisition services in this 

corridor; as requested by the Authority. The 

project EIR/EIS will include engineering and 

environmental impact analysis of the highspeed train line and facilities, including station 

development, and connections with other 

modes of transportation. EIR/EIS process(es) 

will include the involvement of the public, 

interested groups, and appropriate local, 

state, and federal agencies, as determined in 

consultation with Authority staff.

Region: San Francisco to San Jose

Contractor Name: HNTB Corporation

Agreement Total: $55,000,000.00

Term: 10/16/2008 – 06/30/2014

Region: San Jose to Merced

Contractor Name: Parsons

Agreement Total: $55,000,000.00

Term: 11/12/2008 – 06/30/2014

Region: Sacramento to Fresno

Contractor Name: AECOM

Agreement Total: $83,400,000.00

Term: 11/20/2006 – 06/30/2013

Region: Fresno to Palmdale

Contractor Name: URS, Hatch Mott 

MacDonald & ARUP a Joint Venture

Agreement Total: $119,985,612.00

Term: 02/12/2007 – 06/30/2012

Region: Palmdale to Los Angeles

Contractor Name: Hatch Mott MacDonald, 

URS, & ARUP a Joint Venture

Agreement Total: $74,288,000.00

Term: 12/29/2006 – 06/30/2012

Region: Los Angeles to Orange County

Contractor Name: STV Incorporated

Agreement Total: $21,400,000.00

Term: 12/29/2006 – 06/30/2012

Region: Los Angeles to San Diego

Contractor Name: HNTB Corporation

Agreement Total: $94,805,692.00

Term: 02/12/2007 – 06/30/2012

Region: Altamont Corridor Rail Project

Contractor Name: AECOM USA Inc.

Agreement Total: $55,000,000.00

Term: 11/12/2008 – 06/30/2014

Other Contracts

Visual Simulation

Contractor Name: 

 Newlands & Company, Inc.

Agreement Total: $5,000,000.00

Term: 11/15/2006 – 06/30/2012

The Contractor is responsible for the 

development of realistic visual and audio 

simulations that will enable the public, agencies, 

and decision-makers to understand the virtual 

experience of a high-speed train system in 

California.
20

Financial Services

Contractor Name: Infrastructure 

Management Group, Inc.

Agreement Total: $4,000,000.00

Term: 11/15/2006 – 06/30/2012

The Contractor is responsible for the preparation 

of a Financing Plan which includes a financing 

strategy and model for the implementation 

of the California high-speed train system. 

Additionally the Contractor will provide on-call 

advice and analysis to the authority on changes 

and new development to funding strategies, 

sources and availability.

Legal Services

Contractor Name: Nossaman LLP

Agreement Total: $500,000.00

Term: 02/28/2009 – 06/30/2011

The Authority retained outside legal counsel 

to provide legal assistance concerning major 

infrastructure financing, implementation 

and project delivery, including public-private 

partnerships, as well as legal assistance 

concerning changes to and/or compliance with 

federal railroad regulations.

Oversight

In addition to contracting for a Program 

Management Oversight (PMO) team to oversee 

the work of the Program Management Team 

(PMT), the Authority takes a series of steps that 

help ensure contracts are written to prescribe 

specific deliverables and that those items/

services are indeed delivered. The Authority 

works with the state Department of General 

Services to executive effective contracts, and 

in addition to PMT monitoring of deliverables, 

Authority staff tracks invoices, deliverables, and 

program schedules. In the Authority’s planned 

organizational changes, additional state staff 

positions are envisioned for oversight and risk 

management.

The Program Management Team

California’s high-speed rail system is being 

developed with the assistance of a group of 

the world’s leading experts in high-speed train 

planning, construction, and operation. These 

experts have guided the planning, construction, 

and/or operation of high-speed train systems 

around the world, representing hundreds of 

billions of dollars in infrastructure development. 

The Authority has enlisted many of the world’s 

most experienced private engineering and 

planning firms to assist in:

•	 Program Management

•	 Project Engineering

•	 Economic Consulting

•	 Energy Consulting

•	 Environmental Services

•	 Infrastructure Design

•	 Systems, Operations and Ridership

•	 Right-of-Way and Land Use

•	 Specialty Engineering 

•	 Transportation Planning

•	 Constructability Reviews

•	 Procurement

•	 Construction Management 

•	 Testing & Commissioning

•	 Revenue Service Start-up

A brief summary of the Authority’s consultant 

team experience is shown in the box 

below. In 2006, the Authority engaged 

Parsons Brinckerhoff13 to provide program 

management services to oversee and manage 

the California High-Speed Rail Program. The 

Program Manager is providing programlevel management and oversight of eight 

regional consulting firms that are performing 

detailed planning, preparing project-level 

environmental documents, conducting public 

outreach and engagement, and performing 

preliminary engineering design. Each of the 

regional consultants reports to a regional 

13 In October 2009, Parsons Brinckerhoff was acquired by international engineering, construction and investment group Balfour Beatty.
21

manager from the program management team. The regional managers are directing the projectlevel environmental process and preliminary engineering design by the regional consultants, and 

will manage procurement, construction management, testing commissioning, and revenue start-up 

activities within their sections once this aspect of the program commences.

THE CHSTP TEAM

More than 600 persons are currently involved in the 

planning and engineering of the CHSTP, including more 

than 135 senior managers, planners, engineers, and 

operators with significant project work on one or more 

of the high-speed train projects in Europe and Asia, 

as well as the Northeast Corridor. Examples of some 

of these projects and corresponding number of team 

members are shown below: 

 

British HSR Projects: 21

Chinese HSR Projects: 1

Taiwan-Taipei-Kaohsiung: 23

Korea-Seoul-Pusan: 7

USA-North East Corridor: 65

Boston-New Haven, Electrification: 4

French TGV Projects: 2

HSL Zuid-Belgium-Netherlands: 2

Germany-ICE HSR: 2

Denmark Storebaelt & Oresund Links: 3

Portugal Linha do Norte: 2

Spanish HSR Projects: 3

Experts on this project have guided the planning, 

construction and/or operation of HST systems around 

the world representing hundreds of billions of dollars in 

infrastructure development. 

(View Appendix A to this section that shows the Program Management 

Team’s personnel and their relevant experience on high-speed train 

projects around the globe.) 

Successful management of a very 

large and complex undertaking 

like California’s high-speed train 

project requires thoughtful 

planning, proactive decisionmaking, timely execution, and 

regular monitoring. As delivery 

activities overlap and schedules 

compress, the challenge is 

to consider and manage a 

number of separate, often 

concurrent, activities for different 

geographical sections and 

delivery phases of the system, 

including:

•	 Planning, environmental 

review and permitting; 

preliminary engineering, 

land acquisition, and 

negotiations with existing 

railroads, public and local 

entities

•	 Procurement 

documents, design, 

construction, testing 

and commissioning; and 

training 

•	 Revenue service operation 

and maintenance of the 

high-speed rail system 

The PMT has established 

standards for design work, 

environmental protocols, and 

revenue and ridership analysis, 

and manages the regional 

consulting firms under direct 

contract with the Authority. These 

standards are based on worldwide 

state-of-the-art high-speed rail 

experience and U.S. federal and 

state regulatory requirements to 

build and operate the Nation’s 

first very-high-speed rail system. 
22

The PMT is responsible for taking the program from environmental assessment through preliminary 

engineering into procurement. A PMT will then follow the project into final design and construction, 

testing and commissioning, start-up, and revenue service. The overall schedule for the PMT’s activities 

is shown later in this report.

The PMT, having established the standards and protocols, then reviews and confirms the work of the 

regional consulting firms for consistency and accuracy to ensure the system will function as intended. 

Once the project milestones are reached for 30 percent design and environmental approval, the PMT 

will create camera-ready documents for procurement of final design and construction contracts. 

The current PMT organization is shown below. Led by Program Director (Daniels), reporting through 

Deputy Director (Harrison), eight Regional Managers oversee the Regional Consultants. Five other 

functional managers also report to the Director – an environmental program manager (Wolf); an 

engineering manager (Jong); an operations manager (Valsecchi); a staging/procurement manager 

(Dallavalle); and a railroad operations manager (Mosier). Each of these functional managers is 

supported by the staff shown.
23

The current organization will grow as necessary 

to carry out the needs of the project through 

project-level environmental review to 30 

percent design completion. The Authority‘s 

program manager will manage project 

construction from 30 percent design through 

launch of revenue service. Discussed and shown 

below is one possible scenario in which the final 

design and construction management team 

builds from the existing base of the program 

management team. Regional Managers would 

remain in charge of the work in their section, 

acquiring additional staff as needed to manage 

the right-of-way work, the final design/

construction, testing and commissioning and 

revenue service start-up. 

Led by a Program Director with seven direct 

reports, the PMT organization as depicted below 

for the final design and construction phase will 

be structured to provide both headquarters 

and field office staffs responsible for managing 

final design/construction and the operations & 

maintenance (O&M) contract procurement and 

administration, right-of-way (ROW) acquisition, 

construction management, engineering and 

environmental management, safety, quality 

assurance/quality control (QA/QC), program 

administration, program controls, testing 

& commissioning, revenue service start-up, 

and planning/oversight of the O&M of the 

completed system. 
24

Design and construction of the core systems 

will be managed separately from the 

infrastructure design and construction. A 

core systems construction group will manage 

the rolling stock production, train control, 

communications systems, electrification, 

trackwork and maintenance facilities design 

and construction. A testing & commissioning 

group will also report to the Core Systems 

Program Construction Director. A Technical 

Services group will provide support to all the 

regions in the areas of engineering & design, 

environmental compliance & permitting, 

and right-of-way acquisition. Also a Revenue 

Service Operations Director will manage the 

O&M Contract, operations planning, railroad 

coordination, and start-up functions. System 

safety will be managed by a Program Safety 

Manager reporting to the Program Director. 

Configuration management will be the 

responsibility of the Program Controls Manager.
25

Appendix A
26

Appendix A - continued
27

From Today to Passenger Service

The path from where California’s 

high-speed train project is today to 

initial revenue passenger service 

can be divided into planning and 

implementation stages. Over the 

coming two years, the project will 

begin transitioning from the planning stage into the implementation 

stage. This section will describe 

the planning process, show where 

the project is currently within the 

projected timeline, and discuss the 

plan to achieve initial high-speed 

train service from San Francisco to 

Anaheim by 2020.

The Process 

The planning and implementation stages for the California HighSpeed Train Project (CHSTP) include the following:

Planning

Statewide Program Environmental Impact Report/Environmental 

Impact Statement (EIR/EIS), Conceptual Engineering (completed)

•	 Bay Area to Central Valley Program Environmental 

Impact Report/Environmental Impact Statement (EIR/

EIS), Conceptual Engineering (initially completed in 2008; 

additional work in progress based on court ruling)

•	 Draft HST Section Project EIR/EIS, 15% Design – 

Preliminary Engineering (in progress)

•	 Final HST Section Project EIR/EIS, 30% Design – 

Preliminary Engineering (to follow Draft EIR/EIS)

•	 Notices of Determination (NODs) / Records of Decision 

(RODs)

Implementation

•	 Procurement Documents

•	 Permitting

•	 Land Acquisition and Right-of-Way Preservation

•	 Design and Construction

•	 Testing, Commissioning, and Training

•	 Start-up

Planning

Planning for California’s high-speed train began more than two 

decades ago. The Program EIR/EIS documents approved by 

the Authority and the FRA in 2005 and 2008 establish a solid 

basis for the current regional Project EIR/EIS’s and preliminary 

engineering currently underway. Described below are the 

remaining steps to complete the environmental reviews and 

prepare for construction.

Environmental Review

The environmental review process must be complete before 

a final project alignment can be chosen and before any 

construction can take place. The process is being conducted in 

accordance with the requirements of the National Environmental 
28

Protection Act (NEPA) and the California 

Environmental Quality Act (CEQA). The federal 

lead agency responsible for NEPA compliance 

is the Federal Railroad Administration (FRA) 

and the California High-Speed Rail Authority 

(Authority) is the state agency responsible 

for CEQA. To satisfy both NEPA and CEQA, a 

combined environmental document is prepared 

– Environmental Impact Report (EIR) for CEQA 

and Environmental Impact Statement (EIS) for 

NEPA. The combined environmental document 

is referred to as an EIR/EIS.

Previously, largely due to the sheer size 

and scope of the high-speed train project, 

the Authority decided to conduct the 

environmental review in two parts – first with 

a statewide program-level review, and second 

with a more specific project-level review. After 

breaking the project into multiple sections, the 

project-level review is the current state of the 

project. 

Two Program-Level EIR/EISs have already been 

prepared by the Authority: a Statewide EIR/

EIS completed in 2005 and the Bay Area to 

Central Valley EIR/EIS completed in 200814. These 

program level documents (available on-line at 

www.cahighspeedrail.ca.gov15) are the basis for 

the project specific environmental documents 

that are under preparation for the nine sections 

of the 800-mile high-speed train system and the 

Altamont Corridor Rail Project. 

Process

The Project EIR/EIS process begins with 

SCOPING. The Authority and FRA conduct public 

meetings called “scoping meetings” at selected 

locations within the study area to present the 

Program-Level alternatives and optional station 

sites, explain the environmental process, and 

receive comments from the public and agencies 

regarding any issues or concerns they may have 

related to the high-speed train project.

Prior to the scoping meeting, a NOTICE OF 

INTENT (NOI) is prepared and published by 

FRA in the Federal Register. The NOI describes 

the project background, alternatives, and 

potential environmental issues and provides the 

locations and dates for the scoping meetings. 

Under CEQA a similar notice, NOTICE OF 

PREPARATION (NOP) is prepared and filed with 

the State Clearinghouse and advertised in local 

newspapers.

During the environmental process it is 

important to coordinate with local, regional, 

state, and federal agencies to understand 

their environmental approval and permitting 

requirements. An AGENCY COORDINATION 

PLAN is prepared that identifies these agencies. 

The plan outlines the roles and responsibilities 

of these agencies and the project information 

that will be shared with them for comment. 

Letters of invitation are sent to these agencies to 

14 As described previously, the Authority is conducting additional program-level work on the Bay Area to Central Valley EIR in compliance with a court judgment and will 

consider the entire record before it prior to certifying the revised EIR and making a new decision on the Bay Area/Central Valley link for the high-speed train system.

15 http://www.cahighspeedrail.ca.gov/library.asp?p=8224
29

seek agreement on their participation and their 

role in the project. Similar plans are prepared 

to facilitate public outreach, coordination with 

Native American Indian Tribes, and outreach to 

low-income and minority populations.

An ALTERNATIVES ANALYSIS (AA) is conducted 

to help identify the alignments and station 

locations to carry forward in the environmental 

review. It begins with a more detailed look at 

alternatives identified in the program-level EIR/

EIS and development of additional alternatives 

and design options based on input received 

from the scoping meetings. These alternatives 

are further refined based on feedback received 

from public outreach and local planning, 

transportation, and resource agencies. The 

intent of the AA process is to define potentially 

feasible project alternatives, design options, 

and station locations that can meet the NEPA 

Purpose and Need and CEQA project objectives 

while avoiding or minimizing environmental 

impacts. The Purpose and Need Statement is 

a part of the NEPA process to document why a 

project is undertaken. This documentation lays 

the foundation for identifying and evaluating a 

reasonable set of alternatives to be considered 

in engineering and environmental studies that 

are used in preparing an EIR/EIS. During the AA 

process the project study area will be defined 

and the baseline environmental studies started.

A draft of the PROJECT DEFINITION/

DESCRIPTION is prepared when the AA process 

is finished and is updated as engineering design 

reaches 15 percent completion. The draft 

project description will allow the preparation of 

the environmental impact analysis which will be 

completed as the 15 percent engineering design 

is prepared. Then the Authority proceeds with 

the preparation of TECHNICAL REPORTS and 

with the development of baseline conditions, 

impact analysis, and mitigation measures for the 

Draft EIR/EIS.

The DRAFT EIR/EISs will be circulated for public 

and agency review. A review period of 45 to 60 

days will be provided to receive comments on 

the project alternatives, the preferred alternative 

(if identified in the Draft EIR/EIS), 15 percent 

engineering design, environmental issues, and 

mitigation measures. In public hearings the 

results of the Draft EIR/EIS documents will be 

presented and will be accepted regarding the 

project. Responses will be prepared for the 

comments received on the Draft EIR/EISs. Both 

the comments and responses will be presented 

as part of the Final EIR/EIS.

A FINAL EIR/EIS will be prepared for each 

high-speed train section. Upon being made 

available, the final EIRs/EISs will be ready for 

consideration and certification by the Authority 

at a noticed public meeting of the Authority 

board, in conjunction with decisions on final 

alignments and station locations for each 

section of the train system. At the conclusion 

of the process, the Authority will file a NOTICE 

OF DETERMINATION (NOD) for the decisions 

it makes related to each Final EIR. The FRA will 

make the Final EIRs/EISs available for a 30-day 

period prior to issuing a RECORD OF DECISION 

(ROD). The FRA’s RODs and the Authority’s 

final decisions will include commitments to 

mitigation measures to be implemented in the 

construction and operations of the project and 

will identify the subsequent environmental 

permitting that will be required during the next 

phases of design and construction.

Current Status of Project EIR/EIS

The environmental process for each of the 

high-speed train project sections in both initial 

and subsequent phases has been initiated. The 

status of the work prepared for each section as 

of December 1, 2009, is shown in the exhibits 

below and summarized as follows16. 

16 As noted above, the Authority is undertaking revision and recirculation of a portion of its Bay Area-to-Central Valley Program 

EIR and will consider the revised material prior to making a new programmatic decision for connecting the Bay Area to the Central 

Valley. The new decision has the potential to affect some project EIRs.
30

Phase 1 Sections

San Francisco to San Jose Section:

Scoping was initiated in December 2008. Three scoping meetings were held in San Mateo County, 

San Francisco, and Santa Clara County in January 2009. Since then, working in cooperation with 

the Peninsula Corridor Joint Powers Board (Caltrain), the Authority has benefited from significant 

community participation in the identification and refinement of alignment and at-grade, aerial and 

tunnel design options in this corridor, which extends from the planned Transbay Terminal in San 

Francisco to Diridon Station in downtown San Jose. Based on significant engineering, rightof-way and environmental work, these options have been evaluated using Authority criteria to 

identify a set of technically viable alternatives for study in the project EIR/EIS. Figure SFSJ shows the 

location of the alignments and options to be studied in the environmental document. The AA process 

is underway and is expected to be completed in early 2010. 

Current overall percent complete to NOD/ROD is currently estimated to be 20 percent. Target NOD/

ROD date: September 2011. 
31

Figure SFSJ
32

San Jose to Merced Section: 

Scoping was initiated in March 2009. Scoping meetings were held in San Jose, Merced, and Gilroy in 

March 2009. Based on scoping and information from the Bay Area to Central Valley Program EIR/EIS, 

a large number of alignment and at-grade, vertical, and tunnel design options were identified. For 

ease of analysis, the section was divided into six subsections: downtown San Jose, Monterey Highway, 

Morgan Hill-Gilroy, Pacheco Pass, crossing the San Joaquin Valley, and the Wye connection near 

Merced. 

Engineering, right-of-way requirements, constructability issues, environmental constraints, and 

neighborhood concerns were all considered in sifting through more than 30 alignment and design 

options to arrive at a reduced set of alignment and options that the Authority and FRA have agreed 

be evaluated in the project EIR/EIS (see Figure SJM) The AA process is underway and is expected to be 

completed in early 2010. Current overall percent complete to NOD/ROD is estimated to be 20 percent. 

Target NOD/ROD date: March 2012. 

Figure SJM
33

Merced to Bakersfield Section: 

Scoping was initiated in February 2009. Scoping meetings were held in Merced, Madera, Fresno, 

Visalia, and Bakersfield in March 2009. Since then, FRA and the Authority determined that the 

environmental effects of the high-speed train from Merced to Bakersfield were more appropriately 

assessed in two separate documents – one for Merced to Fresno and another for Fresno to Bakersfield. 

As a result, an amended NOI and NOP were issued in October 2009. In June, the FRA and Authority 

agreed that four north-south alignments be carried forward and evaluated in the Alternatives 

Analysis process. The four north-south alignments and the five alignments under study by the San 

Jose to Merced section created 20 possible junction (wye) configurations. Based on additional field 

work, engineering, and environmental review, the alignments, wyes, station location and design 

options were further evaluated using more detailed evaluation criteria. The results of this work 

were then shared with the FRA and the Authority, resulting in an agreement that three north-south 

alternatives and four wye connections with the San Jose to Merced section be studied as part of the 

environmental evaluation process (see Figure MF)

Fresno to Bakersfield Section: 

A similar process was followed for the subsection between Fresno to Bakersfield. Through downtown 

Fresno, 12 alternative alignments – combinations of route and vertical profile (elevation) – were 

identified and studied. Between Fresno and Bakersfield, two corridors, three route alignments, and a 

number of design options were considered. Reaching Bakersfield, the project team considered two 

main route alternatives. Based on engineering analysis, consideration of environmental issues, and 

comments received from local officials, resources agencies, and the general public, the Authority and 

FRA agreed that two north-south alignment alternatives with some design options be evaluated in 

the EIR/EIS (see Figure FB). The AA process is underway for both the Merced to Fresno and Fresno 

to Bakersfield Projects and is expected to be completed in December 2009. Current overall percent 

complete to NOD/ROD for both projects is currently estimated to be 25 percent. Target both NOD/

ROD dates: September 2011.

Figure MF
34

Figure FB
35

Bakersfield to Palmdale Section: 

Scoping was initiated in September 2009. Scoping meetings were held in Bakersfield, Tehachapi, 

and Palmdale in September 2009. From these scoping meetings, as well as discussions with local 

officials and community groups, the project team is now defining the range of study alternatives to 

be considered during the Alternatives Analysis process. This section of the high-speed train system 

will require crossing the Tehachapi Mountains. As a result, significant engineering work has already 

occurred to identify alignment alternatives that meet the Authority’s design criteria. Field work is also 

underway to identify environmental constraints associated with alignment and design options. Figure 

BP shows the alignments identified during the public scoping process. The AA process is expected to 

be completed in the summer of 2010. Current overall percent complete to NOD/ROD is estimated to 

be 10 percent. Target NOD/ROD date: October 2012.

Figure BP
36

Palmdale to Los Angeles Section: 

Scoping was initiated in March 2007. Scoping meetings were held in Los Angeles, Glendale, Sylmar, 

and Palmdale in April 2007. Since then, significant engineering and environmental work has been 

accomplished, including the evaluation of access into and out of Los Angeles Union Station. A 

combination of at-grade, aerial and tunnel options have been considered, resulting in the initial 

identification of 15 alignment and design options. Right-of-way constraints, potential land-use 

impacts, constructability issues, and other factors have resulted in the Authority and FRA identifying 

three basic alignments that are likely to be carried forward for analysis in the project EIR/EIS (see 

Figure PLA). The AA process is well underway and the environmental technical reports are being 

prepared. The Administrative Draft EIR/EIS is expected to be completed in December 2010. Current 

overall completion to NOD/ROD is estimated to be 40 percent. Target NOD/ROD date: December 2011.

Figure PLA
37

Los Angeles to Anaheim Section: 

Scoping was initiated in March 2007. Three scoping meetings were held in Los Angeles, Norwalk, 

and Anaheim in April 2007. Working in cooperation with LA MTA, significant engineering and 

environmental work has been accomplished to identify and evaluate existing and future rail 

passenger and freight operations within the section, access into and out of Los Angeles Union Station 

(LAUS), design options for connecting with the planned Anaheim Regional Transportation Intermodal 

Center (ARTIC), a possible station in Fullerton, and alternative maintenance facility sites near LAUS 

and ARTIC. The AA process and the environmental technical reports have been completed and the 

Administrative Draft EIR/EIS is in preparation, expected to be completed in January 2010. Current 

overall percent complete to NOD/ROD is estimated to be 50 percent. Target NOD/ROD date: March 

2011. (see Figure LAA) 

Figure LAA
38

Subsequent Sections

Merced to Sacramento Section: 

The NOI/NOP will be issued in December 2009. Scoping is planned to start in January 2010, with 

scoping meetings to be held in Sacramento, Stockton, Modesto, and Merced. Significant engineering 

and environmental work will then follow with the AA process to be completed in August 2010. Work 

will then be initiated on preparation of the project EIR/EIS. Current overall percent complete to NOD/

ROD is estimated to be 1 percent. At this early stage, it is envisioned that the environmental review 

would be completed no sooner than 2014, with construction to begin no sooner than 2015. 

(see Figure MS)

Figure MS
39

Los Angeles to San Diego Section: 

Scoping was initiated in October 2009. Scoping meetings were held in La Jolla, San Diego, 

Escondido, Murrieta, Corona, Riverside, Monterey Park, West Covina, El Monte, and Pomona in 

October 2009 and also Ontario and San Bernardino in November 2009. Public participation at these 

meetings was significant, with over 1,900 comments received addressing alignment, engineering, 

and environmental issues. Over the next year, substantial work will occur to identify the range of 

alternatives suitable for study in the project EIR/EIS. The AA process was started in November 2009 

and will be completed in the fall of 2010. Current overall percent complete to NOD/ROD is estimated 

to be 3%. At this early stage, it is envisioned that the environmental review would be completed no 

sooner than 2016, with construction to begin no sooner than 2017. (see Figure LASD)

Figure LASD
40

Altamont Corridor Rail Project:

This is a partnership, separate from the high-speed train system, that the Authority is pursuing 

with local and regional transit agencies to develop a joint-use rail infrastructure project between 

the Central Valley and the Bay Area via the Altamont Pass. Scoping was initiated in November 

2009, with sessions held in Livermore, Stockton, Fremont, and San Jose. The AA process will be 

initiated in December 2009 and is expected to be completed in the summer of 2010. Current overall 

percent complete to NOD/ROD is estimated to be 2%. At this early stage, it is envisioned that the 

environmental review would be completed no sooner than 2014, with construction to begin no 

sooner than 2015. 

(see Figure ALT)

Figure ALT
41
42

Engineering 

The California high-speed train project will use 

proven technology developed and operated 

safely throughout the world over the past 

several decades, which will be brought to the 

United States through the FRA by way of what 

is known as a “Rule of Particular Applicability.” 

There are three key considerations that define 

the technical requirements of the CHSTP. These 

include:

•	 A regulatory framework that sets the 

mandatory safety requirements to 

ensure public safety of the system, which 

is further discussed in the Regulatory 

Approvals section of this document.

•	 System performance objectives that 

define what service levels are required of 

the system, including intercity trip times, 

which are outlined in legislation (AB 3034, 

Proposition 1A) included in the California 

Streets and Highways Code as Chapter 20, 

Division 3.

•	 Design standards, and operations and 

maintenance plans that guide final 

design, construction, and revenue service 

operations, which are further expanded in 

the following sections.

Design Standards and Operations 

& Maintenance Plans

Developed to meet the federal and state safety 

regulations and provide for the performance 

objectives of the California high-speed train 

system, project design standards and operations 

& maintenance plans guide the final design, 

construction, and revenue service operations of 

the high-speed rail system. 

At the program management level, the 

engineering efforts are focused on five key areas 

of activity, all of which are required to confirm 

that the designed high-speed rail system 

delivers the performance objectives. These key 

areas include: 

System-Wide Design Elements 

•	 CHSTP requirements and design for a 

network-wide 2x25 kV traction power 

supply system and coordination with the 

California Public Utilities Commission 

(CPUC) for approvals process.

•	 Standard designs for trackwork, overhead 

contact system (OCS) to ensure a 

consistent application across the CHSTP 

network.

•	 Train control and communications 

systems specifications that provide 

Authority requirements for performance, 

capacity, and safety and for consistent 

application across the CHSTP network.

Design Criteria and Standards

•	 Design criteria that support FRA safety 

standards and requirements, and the 

Petition for Rule of Particular Applicability 

(RPA), including trainsets, track alignment, 

bridge and viaduct design, tunnel 

design, building facility structural design, 

earthworks, drainage design, safety and 

security, geotechnical investigations and 

design, seismic considerations, traction 

power facility equipment, traction 

power system analysis, overhead contact 

system configuration, positive train 

control, system architecture and design 

requirements, system interfaces, and 

supervisory control and data acquisition 

(SCADA).

•	 Design criteria development is 

documented in drawings and technical 

memoranda and includes assessment 

of existing high-speed rail systems, 

analysis of what is appropriate for 

the California high-speed rail system, 

and design guidance for final design 

and construction. Design criteria and 

standards ensure all subsystems deliver a 

reliable and safe high-speed train system 

commensurate with industry standards 

and provide a consistent design approach 

to be applied to each CHSTP section.
43

•	 CHSTP Design Manual is the primary 

design reference for final design and 

construction. Standard specifications and 

special provisions will be developed for 

inclusion in the procurement documents.

Maintenance Plan

Program-wide maintenance concept plans for 

use in defining maintenance facilities, including 

general locations (but not specific sites), size, 

and activities of each facility.

Rolling stock inspection and maintenance plan 

includes activities, and frequency intervals 

(time or mileage as appropriate) typical for 

high-speed rail rolling stock for purposes of 

determining rolling stock facility requirements 

including types of facilities, activities at each 

of the facilities including major equipment, 

required frequency of inspection and 

maintenance, approximate location for each 

of the facility types, approximate size of each 

facility type, and rolling stock sitting time at 

each location. 

Maintenance of track infrastructure, known as 

maintenance-of-way (MOW), inspection and 

maintenance activities and frequency intervals 

(time or mileage as appropriate) typical for 

high-speed rail infrastructure for purposes 

of determining MOW facility requirements, 

including activities at each site, equipment 

requirements, and approximate size and 

locations.

Operational Planning and Concept of 

Operations

•	 Operational planning support to confirm 

programmatic level studies and make 

regional project recommendations to 

optimize system performance.

•	 Operational concepts for the CHSTP, 

including operational objectives, mainline 

configuration, control of operations, 

rolling stock maintenance and repair. 

•	 Operating design criteria including 

operating routes, operating speed and 

restrictions, design level of service, 

operating hours, operating schedule 

and station dwell times, normal and 

contingency modes of operations, 

recovery time, headways, and trainset 

length and seating requirements.

Rolling Stock

•	 Rolling stock specifications to support 

procurement and acceptance of trainsets 

that meet Authority performance and 

safety requirements including maximum 

operating speed, acceleration rate and 

braking rates (service and emergency), 

leading dimensions and clearances, 

trainset make-up, number of seats, 

number of trainsets, distributed power 

versus locomotive hauled, line voltage, 

radial steering trucks, HVAC requirements, 

coupling systems (internal and external), 

carbody materials, energy management 

systems, signal and train control 

technologies, and communications 

requirements.

Regulatory Approvals

In conjunction with the project-specific 

environmental reviews and preliminary 

engineering of each high-speed train section, 

there are a series of governmental requirements 

that must be satisfied to implement the CHSTP. 

These are summarized below, along with the 

steps being taken to comply.

U.S. and State Environmental Regulatory 

Agencies

In order to prepare for the necessary 

environmental regulatory approvals; the 

PMT is conducting statewide environmental 

resource agency coordination meetings. These 

meetings are held three times a year with the 

federal and state resource agencies, such as 

the U.S. Army Corps of Engineers, U.S. Fish 

and Wildlife Service, U.S. EPA, CA Department 

of Fish and Game, State Historic Preservation 
44

Office (SHPO), and others. The PMT role in this 

coordination is to provide early communication 

and coordination to ensure that the technical 

review requirements of the approval agencies 

will be met in the environmental review process 

and subsequent applications, in some cases 

by preparing Memoranda of Agreement or 

Understanding, or Programmatic Agreements 

between these agencies and the Authority and 

FRA. The Authority will continue its meetings 

and consultations with these agencies as it 

moves toward seeking necessary approvals.

U.S. Department of Transportation / FRA

In April 2009, the U.S. Department of 

Transportation published “A Vision for HighSpeed Rail in America” to build a network of 

high-speed rail corridors across America. Within 

this document, the U.S. DOT identified the 

“Need for High-Speed Rail Safety Standards” as 

one of five challenges inherent in advancing this 

new passenger rail vision. This Vision document 

also states that: 

“...the systems approach required to ensure safety of new high-speed rail 

corridors will necessitate consideration of additional changes in several 

regulations, including equipment, system safety, and collision and derailment 

prevention” and that this “opportunity to revise its safety approach in a 

manner that accelerates the development of high-speed rail while preserving 

and improving upon a strong safety regime...will be a challenge for the [FRA] 

as it seeks to administer its critical safety responsibility.”

It is important to note that existing federal 

regulations support train speeds up to 150 mph 

and that introduction of modern high-speed 

rail revenue service operations in California 

and the United States depends on successful 

completion of a RPA for the CHSTP. The RPA and 

Notice of Proposed Rule Making (NPRM) is the 

federal process for introducing and adopting 

new safety regulations into the Code of Federal 

Regulations.

With California at the forefront of modern highspeed rail development in the United States, 

the Authority has taken the opportunity to 

move forward with the FRA and define how best 

to implement a system design approach and 

develop the required federal safety regulations 

and standards for high-speed rail with operating 

speeds up to 220 mph. Since September 2008, 

the Authority and its staff have met with FRA 

regularly to discuss and advance how the CHSTP 

will demonstrate compliance with existing 

federal regulations and, more importantly, how 

to develop high-speed rail safety regulations to 

be included in future federal safety regulations. 

California Public Utilities Commission

The California Public Utilities Commission 

(CPUC) General Order (GO) 95 provides safetyrelated rules for electrified overhead line 

construction on transportation systems. As 

with the federal regulations and high-speed 

rail at 220 mph, there exists a similar challenge 

with GO 95 in that it does not address the 

2x25kV traction power supply system required 

for modern high-speed rail. The Authority is 

meeting with the PUC to 

determine the best way 

to proceed in developing 

the 2x25kV traction 

power supply system 

required for high-speed 

rail operations.

California Department 

of Transportation 

The CHSTP crosses the state highway rightof-way at dozens of locations including 

interstates and state routes. The Authority will 

be working with Caltrans as the owner and 

maintainer of the state’s highway network in 

areas where proposed HST work would affect 

the highway right-of-way. To streamline and 

possibly expedite the review and approval 

process affecting state highway right of way, 

the Authority has executed a statewide Master 

Agreement with Caltrans to provide oversight, 

environmental document review, design 

support, and project approval.
45

EIR/EIS Management to NOD/ROD

In managing the EIR/EIS process through 

final approval of a NOD/ROD for each highspeed train section project, guidance has 

been prepared to ensure that each Regional 

Consultant will:

•	 Conduct public scoping meetings with 

presentation materials intended to inform 

the public of the CHSTP and have them 

understand the environmental process.

•	 Have adequate public, stakeholder, 

and agency outreach during the 

environmental process.

•	 Provide outreach to non-English speaking 

communities or groups.

•	 Conduct the AA process with the 

same level of detail and public/agency 

involvement needed to select the most 

reasonable and feasible options, which 

will avoid or minimize potential impact.

•	 Use the same study area limits to identify 

environmental baseline conditions.

•	 Use the same criteria and significance 

thresholds to identify potential impacts.

•	 Identify similar measures to avoid, 

minimize, and/or mitigate impacts.

During the preparation of the environmental 

deliverables and EIR/EIS documents by the 

Regional Consultants, the Authority and PMT 

staff provide technical and quality assurance/

quality control (QA/QC) review to ensure that 

the guidance and standard methods adopted by 

the Authority and FRA are followed.

Preliminary Engineering

The Authority and PMT Engineering staffs are 

providing ongoing oversight of the Regional 

Consultants to ensure design consistency across 

the system and compliance by the Regional 

Consultants with established design criteria 

and other requirements. While it is common 

engineering practice, and necessary, to break 

out large projects into sections for development, 

design, and construction, it is critical that all 

Regional Consultants are guided by a consistent 

set of design criteria and standards that have 

been established to ensure the CHSTP will 

operate as a single system. Design consistency 

will be achieved by strict adherence to these 

design criteria by the Regional Consultant teams 

as they develop their 15 percent Design and 30 

percent Design submittals as follows: 

15 percent Design – Preliminary 

engineering to support a regional 

project EIR/EIS, provide a more detailed 

construction cost estimate, and conform 

with all requirements and commitments 

included in decision documents (FRA ROD; 

Authority resolution, CEQA findings, and 

Mitigation Monitoring and Report Plan) and 

the Final Statewide Programmatic EIR/EIS for 

the CHSTP, and the Final Program EIR/EIS for 

the San Francisco Bay Area to Central Valley 

portion of the high-speed train system. 

Generally, the level of engineering detail 

will be sufficient to determine the required 

footprint for the CHSTP facilities and identify 

environmental impacts.

30 percent Design – Preliminary 

engineering to support procurement of final 

design and construction services, provide 

a more detailed and accurate construction 

cost estimate and in conformance with 

the regional project Final Environmental 

Documents. Generally, the level of 

engineering detail will identify all elements 

of the project to be constructed, but leave 

construction details and final placement for 

development during final design.

The engineering-related requirements 

generally fall into two categories: technical 

design requirements and safety requirements. 

Compliance with the technical design 

requirements is critical in ensuring that the 

California high-speed train system provides 

the performance mandated by the guiding 

legislation (AB 3034) and set forth by the 

Authority in policy documents. Compliance 

with the safety requirements, which will be 

embodied in the RPA for the CHSTP, is critical to 

securing FRA and CPUC certification to operate 

the California high-speed train in revenue 

service. 
46

Procurement

Procurement activities include development 

of legal, commercial, and technical elements 

for bid documents, bid advertisement, bid 

evaluation, contractor selection, contract award, 

contract administration, and close-out.

Legal Provisions for Bid Documents.

The Authority will have legal and contract 

support from State resources as well as standard 

contract language for use in the procurement 

documents. The PMT will support development 

of legal provisions specific to the differences 

between standard state contractual language 

and procedures with the requirements for 

alternative project delivery, particularly with 

respect to liability and indemnification.

Commercial Provisions for Bid Documents.

In addition to supporting development of 

standard commercial provisions, such as 

progress reporting, and measurement and 

payment policies, the Authority and PMT 

staff will review commercial provisions that 

have been used on other projects to improve 

construction quality, reduce construction costs, 

promote worker safety, minimize disruption 

to the public and stakeholders, and improve 

project schedules. 

Technical specifications and drawings for Bid 

Documents. 

The majority of these documents are currently 

being produced by the PMT and the Regional 

Consultants. These technical documents 

include the 30 percent Design submittals, 

the CHSTP Design Manual, CHSTP Standard 

Specifications, CHSTP Standard Drawings, and 

Directive Drawings. 

Bid Evaluation.

The Authority will manage the bid evaluation 

process with support from the PMT. An 

evaluation manual will be prepared and a 

training seminar will be conducted for the 

Bid Evaluation Team members. The PMT will 

provide technical support to the Authority 

in negotiations with the proposer that the 

Authority selects to enter into a contract. Project 

delivery strategies currently under discussion 

will be further assessed and procurement 

documents will be prepared and ready for 

distribution when the regional section NODs/

RODs are approved by the Authority and FRA. 

Due to the size of the Program, procurement 

documents will likely include a range of 

contract types (e.g., Design/Bid/Build, Design/

Build, Design/Build/Finance, Design/Build/

Operate/Finance, Design/Build/Operate/ 

Maintain/Finance) depending on the overall 

delivery strategy and schedule. Regardless, 

the contracting strategy will reflect the needs 

of the delivery schedule and operations and 

maintenance of a safe and reliable high-speed 

system. 

Construction Management 

Following the NODs / RODs and issuance of 

the procurement documents, projects will 

move on to the final design and construction 

stage. At this point, the Authority will procure 

Regional construction management (CM) 

contractors, who will manage the final design 

and construction to ensure compliance with 

the contract documents. The PMT will focus 

on oversight and support of the Regional 

CM contractors, the management of the 

core systems contractor, and the testing & 

commissioning program. Core system elements 

currently include the high-speed trainsets, 

heavy maintenance facility, train control/

signaling and communications systems, central 

control center, electrification/traction power 

systems, and track. The core systems contractor 

would design, build, demonstrate, test, validate, 

and verify the core system elements in a test 

section (at least about 100 miles long) of veryhigh-speed (250-mph) track in the Central 

Valley between Merced and , before the highspeed train systems elements are constructed 

elsewhere in the initial San Francisco to 

Anaheim route. 

Given the number and value of active 

construction projects and contracts required to 
47

deliver the California high-speed train system, 

multiple construction management teams 

will be required to oversee and manage the 

individual construction projects, similar to the 

Regional Consultant design teams. The PMT’s 

Construction Manager will monitor and actively 

manage these Regional CM teams to confirm 

construction progress, budgets, schedules, 

quality, and compliance with standards 

and specifications. This will ensure that a 

Program-wide perspective is maintained for 

on-time delivery of revenue service, including 

development of schedule recovery plans as 

needed. During this phase, the design and 

construction contractor will likely bring forward 

alternative approaches and designs that 

provide economic benefits to the Authority. A 

change control process will be implemented to 

evaluate requested design variations against 

the published California high-speed train design 

criteria and standards to confirm any impacts 

to safety, reliability, and overall achievement 

of the system performance objectives. Where 

necessary, the PMT will also provide additional 

support to the Regional CM teams or take on 

special assignments to ensure delivery of the 

construction to meet schedule and revenue 

service target dates.

It is critical that construction management 

input be provided at the early stages in the 

development of the program documents 

to ensure a high level of efficiency and 

effectiveness during procurement for design 

and construction services, as well as during 

the construction activity itself. Areas where 

construction management input is critical 

include review of Regional Consultant 15 

percent Design submittal packages for 

constructability issues and review of Regional 

Consultant 30 percent Design submittal 

packages for both constructability and 

bidability issues. 

Agency Agreements and 

Permitting 

Statewide agency agreements will be prepared 

with environmental resource agencies to 

support the environmental permitting required 

during final design and construction. These 

agreements, Memorandum of Understanding 

(MOU), and Memorandum of Agreement 

(MOA) or Programmatic Agreement (PA), will 

clearly identify the Authority’s responsibilities 

in meeting the permitting requirements of 

the federal, state, and regional environmental 

resource agencies. 

The Project’s environmental permitting staff will 

manage the permitting process which begins 

during the preparation of the Final EIR/EIS. The 

major environmental permits that each of the 

HST Projects will require are: 

•	 Section 404 permit under the Clean 

Water Act

•	 Section 401 water quality certification 

permit 

•	 Section 4(f) and Section 6(f) Approvals

•	 National Pollution Discharge 

Elimination System (NPDES) Permits 

•	 USF&WS Section 7 Consultation and 

Biological Opinion 

•	 California ESA permits 

•	 California Department of Fish and Game 

(DFG) Section 1602 Lake and Streambed 

Alteration Agreement 

•	 Caltrans Encroachment Permits 

Right-of-Way Preservation and 

Acquisition

The Authority, with PMT and Regional 

Consultant support, will lead the right-of-way 

preservation and acquisition tasks. This work 

will include identification of “at-risk” parcels, 

preparation of survey documents and legal 

descriptions, and preparation for property 

acquisition negotiations.

Identification of “at-risk” parcels. The 

Authority has the ability to take action to 

protect rights-of-way and preserve land for the 

future high-speed rail alignments using the 

Program EIR/EIS approvals, as available funding 

permits consensual acquisitions consistent with 

environmental review requirements. This might 

be considered in areas where development is 
48

rapidly occurring or where potential changes 

in land use could significantly increase 

construction costs.

Survey documents and legal descriptions. 

As the affected parcels are identified, specific 

data with respect to ownership, easements, 

parcel size, and parcel requirements by the 

CHSTP need to be gathered and documented 

as a legal description to support negotiations.

Negotiation. Specific land acquisition by 

segment can begin upon issuance of the 

regional project NOD and ROD. Right-of-way 

acquisitions will conform to the state and 

federal relocation assistance requirements, and 

other state and federal provisions required at 

the time of acquisition. As part of the right-ofway process, and where shared use with existing 

railroad corridors is confirmed, the Authority will 

negotiate terms of access for shared rights-ofway with railroad owners and operators. 

Program Implementation

Implementing initial revenue service by 2020 

will require setting many wheels in motion 

in 2010. This section outlines a series of preconstruction activities, commencing within the 

next year, essential to achieving that goal. The 

project’s near-term focus must be to advance 

and complete the required environmental 

reviews and preliminary engineering for each 

of the seven CHSTP initial sections between 

San Francisco and Anaheim. In parallel with 

producing these environmental review and 

preliminary engineering documents, the 

Authority must also commence a series 

of activities in preparation for the start of 

construction as outlined below.

Pre-Construction Activities 

One of the first steps in planning for the 

design and construction of the initial system 

is to develop and maintain a Project Master 

Schedule, detailing the myriad of activities 

required to implement the CHSTP. The master 

schedule will include established milestones for 

the NOD and ROD for each section and planned 

design/construction/testing/commissioning/ 

start-up activities in each geographic section 

and project-wide. The master schedule will be 

based on a series of supporting plans, including:

•	 ROW acquisition and relocation plans, 

section-by-section

•	 Contract packaging plan section-bysection and system-wide

•	 Procurement plan, including early 

work, core systems, Design / Build 

(D/B) infrastructure and system-wide 

construction contracts, and system 

operator 

•	 Testing & Commissioning plan, and 

•	 Revenue Service Start-up plan

The work plan must take into account the 

schedule requirements and milestones 

established by the FRA for ARRA Track 2 

grant funded projects.

The master schedule will identify early 

construction work – utility relocation, ROW 

clearing, railroad track relocation, building 

demolition, major grade separations, and other 

“early work” to reduce construction risks. The 

vast majority of the heavy construction work 

will be procured and delivered through large 

D/B contracts, but early work will be contracted 

using the best available means, including 

traditional design-bid-build and railroad force 

account, as appropriate, as well as through 

smaller D/B contracts. In each case, a financial 

package from the private sector will be part of 

the contract approach.

Another key near-term activity is procurement 

of the system operator. There are a number 

of options for how the operations and 

maintenance (O&M) contract could be 

structured. It could be packaged with the core 

systems procurement or separately as a longterm (multi-year) concession. The exact timing 

and structure of this procurement has not 

been decided yet; however, an initial Request 

for Expression of Interest (RFEI) for the system 

operations and maintenance contractor, along 

with RFEIs for the major civil infrastructure, core 

systems/trainset contractors, and financing, 
49

was issued in 2008. Since then, the Authority 

has continued to reach out to the private sector 

to gauge interest in the project as well as 

seek guidance on technical and procurement 

issues. In the future, draft contract documents 

will be sent for industry review to selected 

respondents, and the industry feedback will 

be used in preparing the final Requests for 

Proposals and contract documents for the major 

contract procurements to follow.

In 2010, the Authority will develop draft RFPs 

for industry review of the core systems. The 

proposed approach involves contracting with a 

consortium – a single contract team – to design, 

build, demonstrate, test, validate, and verify 

the core system elements in a test section (at 

least about 100 miles long) of very-high-speed 

(250-mph) track in the Central Valley between 

Merced and Bakersfield, before the highspeed train systems’ elements are constructed 

elsewhere in the initial route. The roles and 

responsibilities of the O&M and core systems 

contractors are fundamental to achieving a safe, 

reliable, maintainable and profitable high-speed 

rail service.

Prior to the possible hiring of a core systems 

consortium, individual sections of the Phase 1 

HST final design and infrastructure construction 

will commence as environmental reviews are 

completed, and as funding is available, very 

likely starting with the ARRA-funded program 

corridors. Applications for ARRA-funded 

corridor design and construction programs 

were submitted for the San Francisco-San Jose, 

Merced-Fresno, Fresno-Bakersfield, and LAAnaheim sections. The funding levels and timing 

of the ARRA-program work will affect how soon 

construction can start and which sections are 

built first. Various scenarios can be envisioned 

for implementing pieces of the system, and 

connecting them into operable segments. The 

scenario ultimately adopted will depend in 

part on the outcome of the ARRA Track 2 grant 

requests and negotiations, and which sections 

will have near-term committed funding by the 

High-Speed Rail Authority Board.

The infrastructure contractors may install the 

track and electrification systems outside of the 

test track area; the core systems contractor will 

install all other systems elements project-wide. 

As part of the core systems contract, the heavy 

maintenance facility (HMF), to be built adjacent 

to the high-speed test track, will be needed 

in time to receive trainsets for final assembly, 

testing and commissioning. The HMF likely will 

house the central control center for the entire 

system. 

Depending on the ARRA grant determination, 

infrastructure in the LA-Anaheim, MercedBakersfield, and San Francisco–San Jose sections 

of the route might be constructed first, followed 

by the San Jose to Merced, Bakersfield to 

Palmdale and Palmdale to LA sections. 

Other pre-construction activities include:

•	 Developing draft construction RFP 

documents and construction contract 

documents: General Provisions, Special 

Provisions, Standard and Directive 

Drawings and Standard Specifications

•	 Identifying Construction Management 

(CM) requirements and preparing RFPs 

for procuring Regional CM consultants 

•	 Commencing ROW acquisition, 

particularly “protective” acquisitions 

•	 Obtaining all necessary environmental 

permits

•	 Applying for FRA and CPUC safety waivers 

and approvals, including the FRA “Rule of 

Particular Applicability” for the CHSTP

Construction Staging

Upon receiving environmental approvals and 

finalizing funding agreements, the Authority 

will issue construction RFPs, continue ROW 

acquisition, and procure CM services. Early work 

will commence while the major D/B contracts 

are being advertised and awarded. Early 

work will include site clearing and grubbing, 

railroad track and facilities relocation, building 

demolition, environmental remediation work, 

and utility relocation in coordination with the 

major D/B contract schedules. The Contract 

Procurement Plan will be updated as the timing 

of additional environmental approvals and 
50

funding sources becomes known. The Project 

Master Schedule will be updated monthly 

to incorporate contractors’ approved CPM 

schedules and monthly updates. The general 

sequence of construction is envisioned to be 

as follows:

•	 Advertise, bid and award ARRA-funded 

design and construction

•	 Advertise, bid and award other early 

work, section-by-section

•	 Advertise, bid and award core systems in 

the Merced to Bakersfield section

•	 As environmental approvals are received 

and funding is available, advertise, bid 

and award other major D/B infrastructure 

contracts 

•	 Develop and implement integrated 

systems testing, verification and 

validation of the core systems design

•	 Complete the test track, HMF, central 

control and other core systems elements 

•	 Receive trainsets, continue integrated 

testing, “burn-in” and vehicle acceptance

•	 Incorporate and integrate the test track 

verification and validation results with 

the line section track, electrification and 

regional “systems” elements and with 

the system-wide systems contracts (train 

control/signaling and communications, 

SCADA, and central control contracts)

•	 Administer early work and D/B contracts, 

including field changes, change orders, 

claims management, and contract closeouts

•	 As facilities are completed, the Authority 

will commission stations, facilities, and 

systems to achieve operational readiness 

in conjunction with the integrated 

testing of each section

•	 The Authority will obtain CPUC and FRA 

safety approval prior to commencing 

revenue service in Minimum Operable 

Segments, which will be further defined 

as the Project Master Schedule is further 

developed 

•	 Once the operable segments are 

connected and sufficient high-speed 

trainsets have been accepted, and 

system-wide testing, commissioning 

and training are completed, full Initial 

revenue service can commence

Independent Utility

Infrastructure in the LA-Anaheim, MercedBakersfield, and San Francisco–San Jose sections 

as proposed in the federal grant applications 

would have independent utility even if the 

entire CHSTP were not completed.

The LA-Anaheim corridor program will fully 

grade-separate the existing right of way, expand 

the width of the right-of-way where needed, 

construct the alignment and track needed for 

separate 110 mph operation to standards that 

would allow the operation of the high-speed 

train and lightweight DMU equipment, and 

improve stations at Anaheim and Los Angeles. 

The grade separation of this busy line, with 

projected 60 freight trains, 22 intercity Amtrak 

Surfliner trains, and 32 Metrolink trains daily, will 

greatly enhance crossing safety for rail and road 

users, decrease the causes for delays, and allow 

faster operations schedules. 

In the Central Valley, the Authority is proposing 

to build the rural sections of high-speed track 

between Fresno and Bakersfield and between 

Merced and Fresno in a way that would provide 

independent utility to Amtrak’s San Joaquin 

service between those cities, if for whatever 

reason the rest of the High-Speed Rail system 

were not completed at the same time. The 

grade separations would greatly enhance 

crossing safety for both passenger and freight 

trains in the corridor, and the new high-speed 

trackage would be configured so that it could 

be connected to the existing Amtrak stations 

in Merced, Fresno and Bakersfield, if the system 

were not completed at the same time.

In the San Francisco – San Jose corridor, the 

Project would help implement long-standing 

plans to electrify the corridor, and to gradeseparate several high-priority road rail crossings 

in order to prepare the ground for high-speed 

train service, and allow Caltrain to operate more 

reliably and quickly. As in the other projects 
51

above, the grade separations would greatly 

enhance crossing safety for rail and road users. 

Moreover, the speed-up that Caltrain estimates 

is possible as a result of these improvements 

would enhance the attractiveness of the Capitol 

Corridor trains and the Starlight, which use the 

San Jose Diridon station, as well as save time 

for those in the northern part of the Peninsula 

who access the Amtrak Capitol Corridor trains 

at Emeryville via Caltrain and the dedicated bus 

link from the Caltrain 4th & King Street station.17

Funding permitting, all sections of the route 

could be under construction by the 2012–2014 

timeframe. As individual sections are completed 

and tested they could be operated as “minimum 

operable segments.” For instance, once the San 

Jose-Merced section is completed, it could be 

connected to the Merced-Bakersfield section 

and initial service could commence between 

San Jose and Bakersfield. Likewise, once the 

line is built and tested through the Tehachapi 

Mountains, initial service could be extended 

to Palmdale. Incremental construction and 

connection of operable segments would 

continue until the entire San Francisco-toAnaheim system is fully operational.

Schedule

The following Master Summary Schedule for the 

San Francisco to Anaheim portion of the CHSTP 

is split in two parts: program management 

activities and right-of-way acquisition and 

construction activities. Together they show 

major program management activities 

and currently projected timelines for the 

regional project-level environmental review/

preliminary engineering, target NOD/ROD 

milestones, procurement activities, final design/

construction durations, testing/acceptance, and 

pre-revenue operations leading to the start of 

initial revenue service in 2020. This schedule 

will be updated as the project advances and as 

funding is secured to support the final design/

construction of the Project.

17 See discussion of court order at p. 7.

SAN FRANCISCO–ANAHEIM MASTER SUMMARY SCHEDULE – Program Management Activities
52

SAN FRANCISCO–ANAHEIM MASTER SUMMARY SCHEDULE – ROW and Construction Activities
53

Outreach

Effective outreach is integral 

to achieving the goals of the 

high-speed train project, and in 

its mission to be transparent and 

accountable to the people of 

California it is incumbent upon the 

Authority to effectively engage the 

public. 

Events over the past 13 

months have necessitated that the 

Authority’s outreach efforts turn 

from educating Californians about 

high-speed rail’s opportunities to a 

new level of informational outreach 

that engages and empowers the 

broader public as they become 

stakeholders in a project that 

is moving toward construction. 

With the higher visibility that will 

accompany construction start-up 

– potentially as early as 2011 – the 

Authority’s responsibility to keep 

Californians fully informed becomes 

even more demanding. 

Moving forward, the Authority 

plans to increase the amount, 

and improve the quality of 

outreach efforts – to reach more 

Californians with more information 

– through refocusing its regional 

outreach teams and upgrading 

outreach tools such as Web-based 

interactive tools, outreach to ethnic 

communities, and partnerships with 

legislators and local government 

agencies. 

Between today and the 

commencement of construction, 

there will be ample and significant 

opportunities for public input and 

interaction. These opportunities are 

detailed in the following section. 

Outreach to government agencies, stakeholders, the news 

media and the public has been and continues to be a 

significant obligation and mission of the California High-Speed 

Rail Authority. Statewide and section-level outreach efforts 

communicating plans and benchmarks for the project ensure 

transparency, provide a platform for local stakeholder input, 

and help build strategic partnership alliances that will result in 

collaborative operation of the system. 

Outreach Efforts to Date

To date, the California high-speed train project’s outreach and 

public information efforts have been coordinated primarily 

by subcontractors18– at the statewide level by a subcontractor 

(Deutschman Communications Group) directed and managed 

by the Parsons Brinckerhoff Program Management Team 

(PMT), and on a regional level by subcontractors to each of the 

Regional Project Management teams. 

Outreach has been focused on broad public project awareness 

and on the outreach and public engagement required within 

state and federal environmental review processes. 

Through the environmental review process, outreach has 

relied heavily on the project’s regional-focused engineers and 

environmental planners, who have interacted with regional 

transportation agencies, cities, counties, legislative staff, and the 

public through public meetings and written materials. 

Moving Forward

Events over the past 13 months necessitate increased outreach 

efforts. Those events include:

•	 Passage of Proposition 1A

•	 Inclusion of high-speed rail funding within the American 

Recovery and Reinvestment Act

•	 Increased interest and demand for information from 

California residents, local governments, legislators, and 

the media

•	 Significant project planning milestones including public 

scoping meetings and entering the alternatives analysis 

process within several project sections

California High-Speed Rail Authority’s Outreach Program

18 Detailed below within discussions of each regional section
54

Recognizing the need for increased outreach 

efforts, the Authority in August 2009 

created the position of Deputy Director for 

Communications, Policy and Public Outreach, 

and Governor Schwarzenegger appointed a 

person to fill that role. The goal of creating the 

position was to bring outreach activities under 

the direct control of the Authority, to streamline 

the outreach program, and to increase the 

quantity and quality of outreach activities. 

To that end, the Authority also initiated the 

procurement process to bring aboard a new 

Statewide Communications and Outreach 

contractor. Ogilvy Public Relations Worldwide 

was chosen in November as that new 

contractor, and is expected to begin work with 

the Authority in January 2010, following the 

approval by the Department of General Services 

of a contract.

Overall Communications Strategy 

It is the Authority’s goal to reach as many 

stakeholders and interested parties as possible 

with thorough, accurate information about the 

planned high-speed rail system and its progress. 

Those stakeholders and interested parties 

range from California residents and community 

groups to elected officials, the financial industry, 

international governments, and private 

businesses. 

The Authority’s outreach efforts occur on dual 

but complementary tracks. The first is the public 

engagement required as vital steps within the 

environmental review and planning process. 

This occurs on a section-by-section local level. 

The second track is general public awareness of 

the project, managed at the statewide level. 

To achieve its outreach goals, the Authority 

employs a number of tools, outlined below.

Public Engagement

The Authority’s outreach program is responsible 

for engaging and responding to the public. 

It accomplishes that by directly dealing with 

the public in public meetings, through written 

correspondence, person-to-person interaction, 

and other modes of communication. It also 

engages the public through partnering with 

regional transportation agencies, through local 

governments, through legislators, and through 

the news media. 

Moving forward, the Authority and its 

new streamlined outreach organization 

plan to increase the amount and quality of 

public engagement by refocusing regional 

management outreach staff and by improving 

its Web-based public interaction tools. 

News Media Relations

The Authority must rely on the news media as a 

primary source of communication to the public, 

since it does not currently employ advertising 

or other costly mass-marketing options. The 

outreach team writes and distributes all press 

releases and media advisories, prepares and 

places articles in state and national publications, 

responds to requests for information from 

journalists, and schedules media interviews 

with appropriate representatives. In addition, 

the team writes or prepares all communication 

instruments for the Board and project, including 

regional outreach materials and press relations 

for Authority Board meetings and activities. 

Guided by the deputy director for 

communications and public outreach, outreach 

team and PMT members handle virtually all 

international, national, statewide and regional 

media relations for the Authority, responding 

to nearly 1,000 media inquiries in the past 

year alone. This work has generated significant 

coverage of California’s high-speed train system 

in recent months, including coverage by CBS 

Sunday Morning, PBS Television, National Public 

Radio, the New York Times Sunday Magazine, 

Wired Magazine and dozens of other national, 

state and local print and broadcast media. 

Because of the changing nature of the news 

media, the outreach program makes significant 

efforts to reach public and news media 

audiences through Web-based communications 

vehicles. 
55

In recent months, due to interest in available 

ARRA stimulus funding and to progress in the 

California high-speed rail project’s development, 

interest from media outlets has increased and 

will bring more awareness to the project. 

Web Site Strategy and Content Management

The Authority’s Web site is a vital tool for 

providing project information and details to 

interested parties and for providing another 

means of contacting the Authority. The Web site 

houses all documents developed by and for the 

Authority – from reports and studies to Board 

meeting agendas, project details, environmental 

documents, etc. 

The Authority is currently reviewing, updating 

and reprogramming its Web site, focusing 

on making the site more user-friendly. A key 

goal is to regionalize available information 

to provide better project understanding for 

local stakeholders. Responsibilities include 

regular updates to the Web site and posting 

of new information such as EIR/EIS materials, 

Board meeting documents, program media 

statements, press releases, and more. The site 

now includes Webcast capabilities for Board 

meetings, providing stakeholders an easier way 

to participate and obtain information. 

Additionally, the Authority has begun to employ 

social media tools to provide information and 

a means of interaction where today’s Internetusers are congregating. 

National and International Stakeholder 

Presentations

The Authority receives dozens of requests every 

year from national and international leaders 

and organizations to provide information 

and presentations about the status and 

details of California’s high-speed train. Recent 

presentations were prepared for U.S. Secretary 

of Transportation Ray LaHood; the Federal 

Railroad Administration; dozens of business, 

transportation and environmental groups 

throughout the state; and national and 

international conferences, such as the American 

Public Transit Association and the Cordoba 

Conference on high-speed train development in 

Spain. 

The Authority already has experienced a 

significant increase in demand from national 

and international sources for information and 

contact – an important element of the outreach 

program because of the interconnectivity 

of high-speed train planning, design and 

production resources and programs around the 

world.

Presentation and Printed Materials

Important to any statewide project of this scope 

are printed materials that help communicate 

key project details. The outreach program 

prepares such materials as:

•	 Statewide and region-specific 

brochures and fact sheets. 

•	 PowerPoint presentations for 

CHSRA speakers.

•	 E-Newsletters and Alerts, sent to 

the CHSRA stakeholder databases 

of thousands of individuals.

The Authority has created visual simulations 

over the past several years to help the public 

and stakeholders better understand the 

proposed system – what it will look like, where 

it will go, how it will interconnect with regional 

transportation networks and how it will affect 

local communities. Those simulations play a 

valuable role in establishing understanding 

and context for environmental analysis, local 

planning and partnership development.

Moving forward, the Authority will focus its 

printed and other materials at a regionalized 

and intensely local level, to provide Californians 

information about the train project in very 

intimate terms of how its development, 

construction, and ultimate service will affect 

their communities and daily lives. 
56

Ethnic and Diverse Communities Outreach

Statewide and regional outreach efforts have 

always included significant steps to engage, 

inform and take input from California’s diverse 

communities. Multilingual printed materials 

and legal advertising have been a compulsory 

part of the Authority’s outreach. Staff and 

contractors regularly interact with ethnic and 

diverse audiences and stakeholders. Moving 

forward, as the demands of public outreach 

increase, the Authority intends to add a specific 

ethnic outreach component to the statewide 

communication plan and team, as a member 

of the Ogilvy team being brought on board. 

That person will advise the Authority on ethic 

outreach strategies and lead the effort to 

implement them. 

Partner Agencies

The Authority will increasingly rely on partner 

agencies with established contacts and 

interaction with their communities to assist 

the Authority on spreading information about 

the high-speed rail project. Those agencies 

include regional transportation agencies such 

as the Orange County Transportation Authority 

and SamTrans. Through its newly appointed 

deputy director for communications and public 

outreach, the Authority is beginning to more 

directly engage those partner agencies with 

its outreach efforts, in addition to its planning 

efforts. 

Legislative Outreach

Partnering with members of the Legislature 

and their staffs is a critical piece of reaching 

Californians with information about the 

high-speed train project and also of hearing 

their voices. Legislators have their fingers on 

the pulse of their communities, and are an 

established viaduct of communication from 

local communities into the state capital. The 

Authority, led by its newly elected Board 

Chairman, is taking steps to better inform 

legislators of the train project’s progress and 

more effectively engage legislators and their 

staffs in the public outreach process. 

Communications Protocols

The outreach team regularly updates detailed 

communications protocols to standardize 

outreach among and within sections, which 

ensures consistent communication formats, 

styles and language. Similar protocols have 

been developed for the CHSRA board of 

directors and other project partners to 

ensure consistent and accurate information 

is distributed to the public and to create a 

framework for more efficient interagency 

activities.

Additionally, the Authority’s program 

management team has committed to 

training its regional managers in Context 

Sensitive Solutions, an outreach tool being 

employed with the communities in the 

Bay Area’s Peninsula that is a collaborative, 

interdisciplinary approach that ensures input 

from all stakeholders. By ensuring that the 

high-speed rail project’s regional managers are 

trained in this collaborative public engagement 

mindset, the Authority believes outreach efforts 

will improve in quality. 

Regional Outreach Efforts

As it had done for the public unveiling of the 

Program-Level EIR/EIS for the majority of the 

high-speed train line, the outreach program 

continues to manage the development and 

implementation of a communications strategy 

to support the public release of the project-level 

documents for the planned system.

Under direction of the deputy director for 

communications and public outreach, the 

statewide outreach team closely collaborates 

with the PMT and nine section teams to develop 

and carry out section-specific public outreach 

programs in key areas around the state to 

inform stakeholders and the media about public 

hearings, board meetings and other relevant 

issues related to the project. The Authority 

manages the review and approval process for all 

regional public-education and project-level EIR/

EIS material. 
57

OPPORTUNITIES FOR PUBLIC INPUT / ENGAGEMENT / OUTREACH

The Authority’s responsibility for outreach associated with project-level environmental review requires use of a 

comprehensive set of tools to ensure all parties are heard and opinions considered, both to comply with state and 

federal law and to meet the Authority’s goal of transparency. Those tools include: 

•	 Establishment of a single point of contact to ensure access and openness

•	 Briefings/meetings with existing community and civic organizations (i.e., business groups, service clubs, 

neighborhood associations, etc.)

•	 Organized and highly publicized community-wide meetings 

•	 Regular updates for local elected officials, both one-on-one and at regularly scheduled public meetings

•	 Outreach to key local agency management, planning and engineering staff

•	 Direct mail/print ads where necessary to communicate project information and to meet CEQA legal 

requirements

•	 Cooperative outreach and communications with local jurisdictions (i.e., utility bill inserts, newsletters, etc.)

•	 Communication support for high-speed train Technical Working Groups

•	 Design workshops (to be held in cities identified for potential future HSR stations)

•	 Electronic access to information (i.e., Web site, e newsletter, on-line town hall, etc.)

•	 Specialized translations of communications materials into multiple languages

•	 News media outreach (alerts, editorial board presentations, news releases, etc.)

•	 Cable TV access to information and events

Local Outreach Activities

The Authority provides oversight for all local 

outreach, including public affairs consultation 

with local government agencies and elected 

leaders, outreach to local community 

organizations, news media relations and 

coordination of activities with the Authority staff 

when Board activities touch their regions. 

Working with the PMT, regional outreach team 

members monitor and participate in CHSRA’s 

regional Technical Working Group meetings 

to assist local engineering and environmental 

teams on the high-speed train project. Below 

is a summary of public outreach activities, 

organized by broader region.

Following is a description of the regional 

outreach teams and lists of groups, entities, and 

individuals they have interacted with regarding 

the project to date. 

Bay Area Outreach

Responsible Outreach Contractors:

CirclePoint, EDAW-AECOM, Garvey 

Communications

This region includes the preferred Pacheco 

Pass route through Gilroy to San Jose and the 

San Jose-to-San Francisco section. Outreach 

activities in the sections within this region have 

focused on city-specific strategies appropriate 

to a proposed high-speed train line that crosses 

so many different communities. This region has 

experienced a high concentration of attention 

from diverse groups with acute sensitivities to 

the design of the system – from individual cities 

to environmental organizations to regional 

transportation agencies. 
58

CONTEXT SENSITIVE SOLUTIONS (CSS)

In the Bay Area’s Peninsula, the Authority, the project management team and its regional management 

team have pursued a structured decision-making approach to better fit the high-speed train to the local 

communities it serves. Known as Context Sensitive Solutions, and offered as a tool by members of the local 

community, it is a collaborative, interdisciplinary approach that ensures input from all stakeholders. It is 

an approach that helps preserve and enhance scenic, aesthetic, historic, community, and environmental 

resources, while improving or maintaining safety, mobility, and infrastructure conditions.

In cooperation with the PMT, the local outreach team has coordinated and prepared documents and 

presentations for scores of meetings related to the project and will continue to do so until the start 

of construction and eventual revenue operation. In the past year alone, the team has coordinated 

outreach to nearly 100 individual organizations, chambers of commerce, public agencies and 

stakeholder groups. Groups and events over the past year have included but are not limited to 

(in alphabetical order):

•	 ACE

•	 Alameda CMA

•	 Altamont Working Group

•	 Assemblymembers: Ruskin, Hill, Ma, 

Yee, Ammiano and Leno

•	 Audubon Society

•	 BART and BART Board of Directors

•	 Bay Area Council

•	 Breathe California Clean Air Awards

•	 CalTrain

•	 CalTrans – District 4

•	 CalTrans – Cal Mentor Program

•	 Capitol Corridor 

•	 Chambers of Commerce of: Berkeley, 

Mountain View, Concord, San Mateo, 

San Francisco (Global Warming 

Summit), Palo Alto and Menlo Park 

•	 Cities of: San Francisco, San Jose, 

Millbrae, Atherton, Redwood, Menlo 

Park, South San Francisco, San Bruno, 

Brisbane, Santa Clara, Palo Alto, 

Sunnyvale, Fremont, Morgan Hill, Gilroy, 

Los Banos and Chowchilla

•	 City Councils of: Menlo Park, San Bruno, 

Burlingame, Mountain View, Sunnyvale, 

Millbrae, South San Francisco and San 

Francisco 

•	 Committee for Green Foothills

•	 Community Club of Rossmoor

•	 Downtown San Mateo Association

•	 East Bay Engineers Club

•	 Grasslands Water District

•	 Greater Gardner Community Association

•	 Green Career Fair

•	 Greenbelt Alliance

•	 Lake Merritt Breakfast Club

•	 Latino Issues Forum

•	 Monterey County

•	 Nature Conservancy

•	 North Willow Glen Neighborhood 

Association

•	 Palo Alto – Southgate Community Meeting

•	 Palo Alto Transportation Department

•	 Peninsula Cities Coalition

•	 Railway Industrial Clearance Association

•	 SAMCEDA

•	 San Bruno Leadership

•	 San Delmas Park Neighborhood

•	 San Francisco Building and Construction 

Trades Council

•	 San Francisco Labor Council 
59

•	 San Francisco Transportation Authority

•	 San Joaquin Council of Governments

•	 San Joaquin Partnership Meeting

•	 San Jose Chamber of Commerce/

Downtown Association/Convention & 

Visitors Bureau 

•	 San Mateo Building Trades Council

•	 San Mateo Transportation Authority

•	 Santa Clara Valley Transportation 

Authority

•	 Sierra Club, Loma Prieta Chapter

•	 Silicon Valley Land Trust

•	 Silicon Valley Leadership Group

•	 Silicon Valley Projections Conference

•	 SPUR

•	 Stanislaus COG

•	 Sustainable San Mateo

•	 TALC and ACEC-CELSOC

•	 Transbay Groundbreaking

•	 Transit Camp Regional Planning Conference

•	 Tri-Valley Policy Advisory Committee

•	 WTS – East Bay Construction Specification 

Institute

Within the past year, the outreach program also has assisted in building alliances with numerous 

regional and national organizations and government leaders, including:

•	 Speaker of the House Nancy Pelosi

•	 San Francisco Mayor Gavin Newsom

•	 San Francisco Board of Supervisors’ President Aaron Peskin

•	 San Jose Mayor Chuck Reed

•	 Rep. Jackie Speier

•	 Rep. Anna Eshoo

•	 San Francisco Chamber of Commerce

•	 State Senator Carol Migden

•	 Silicon Valley Leadership Group

•	 Valley Transportation Authority

•	 Capitol Corridor

•	 Sierra Club
60

Central California Outreach

Responsible Outreach Contractors: 

The Forhan Company, Endicott Communications, Gene Tackett Consulting Services, URS

This region encompasses a broad swath of the state, with widely separated communities each with 

widely divergent character and need. Some of the earliest and most important elements of the system 

– the test track and heavy maintenance facilities – will be located in this region.

Outreach in this region has included a wide variety of groups and events, including but not limited to 

(in alphabetical order):

•	 Altamont Working Group – regular 

participant

•	 American Public Works Association, Central 

Valley Chapter

•	 Antelope Valley Board of Trade

•	 Association for Commuter Transportation 

(Sacramento)

•	 Bakersfield Breakfast Rotary Club

•	 Bakersfield Mayor Harvey Hall and his staff

•	 Breathe California (Sacramento)

•	 California Partnership for the San Joaquin 

Valley – attend quarterly board meetings

•	 CalTrans Corridor Project

•	 Central California Hispanic Chamber of 

Commerce (Fresno)

•	 Chambers of Commerce of: Stockton, 

Manteca, Lodi, greater Merced, Sacramento 

Metro, Atwater, Elk Grove, Turlock, Galt, 

Taft, Tracy, Orange Grove, Auburn, Ripon, 

Rancho Cordova, Greater Stockton, Fresno 

(Transportation Committee) and Bakersfield

•	 Chowchilla Lions Club

•	 Chowchilla Rotary Club

•	 Cities of: (provided presentations or study 

sessions to) Hanford, Visalia, Corcoran, 

Wasco, Shafter, Tulare, Fresno, Madera and 

Merced

•	 Counties: provided presentations to Board 

of Supervisors in Fresno, Kings, Tulare 

(individual meetings), Madera and Merced

•	 Clean Air Partnership

•	 Clovis Rotary Club

•	 Downtown Sacramento Partnership

•	 Downtown Stockton Alliance

•	 Folsom Transportation Panel Discussion

•	 Fresno Council of Governments

•	 Fresno Downtown Station Planning Meeting

•	 Fresno Economic Development Corporation

•	 Fresno Mayor Ashley Swearengin (elected 

Nov. 2008) and Former Fresno Mayor Alan 

Autry (through December 2008)

•	 Fresno Revitalization Corp. Board of 

Directors

•	 Fresno Technical Assessment Group 

(consisting of city, county and COG staff)

•	 Great Valley Center (Modesto) – assisted in 

Authority’s role as major sponsor of annual 

conference in Sacramento – April 2009 – 

staffed Authority booth and arrangements 

for panel session on HST project

•	 Hanford Kiwanis Club

•	 HST Consolidation TAG Meeting

•	 Highway 50 TMA

•	 Kaiser Commuter Group

•	 Kern County Resource Management Team

•	 Kings County Board

•	 Leadership Fresno

•	 Legislators (State): Assembly Republican 

Leader Mike Villines, Senate Republican 

Leader David Cogdill, Ashburn, Denham 

(Chief of Staff), Perata (Staffer) and George 

Runner

•	 Madera City Councilmembers: Robert 

Poythress, Gary Svanda and Mayor Sam 

Armentrout
61

•	 Madera County Supervisors: Bigelow, 

Rodriguez, Moss and Wheeler

•	 Madera County Transportation 

Commission

•	 Modesto Rotary Club

•	 Modesto Sons in Retirement

•	 Oildale Rotary Club

•	 Placer County Transportation Planning 

Agency

•	 Point West Area Transportation 

Management Agency

•	 Port of West Sacramento

•	 Porterville Lions Club

•	 Rancho Cordova Economic 

Development Department

•	 Reedley Kiwanis Club

•	 Sacramento Air Quality Management 

District

•	 Sacramento Area Council of 

Governments (SACOG)

•	 Sacramento Area Trade and Commerce 

Organization (SACTO)

•	 Sacramento Chamber of Commerce’s 

Perspectives 2008 Event (attended by 

more than 1,000 leaders)

•	 Sacramento Convention and Visitors 

Bureau

•	 Sacramento Mayor Kevin Johnson and 

his staff

•	 Sacramento Metropolitan Air Quality 

Management District

•	 Sacramento Rotary Club

•	 Sacramento Transportation Authority

•	 San Joaquin Council of Governments

•	 San Joaquin County Partnership

•	 San Joaquin Valley Regional Policy 

Council – COG Directors for the 

Central Valley Counties

•	 Senator Darrell Steinberg’s Office

•	 Sierra Oakhurst Kiwanis Club

•	 South Natomas TMA

•	 Stockton Alliance

•	 University of the Pacific (UOP)

•	 Valley Vision

•	 Yolo County Supervisors: Thompson 

and Rexroad

•	 Yolo Transportation District
62

Southern California Outreach

Responsible Outreach Contractors :

VMA Communications, Arellano Associates, Consensus Inc., Katz and Associates

Outreach activities in the sections within this region are perhaps the most complex on the system. 

The team must meet the needs of early development of the system in an area with an existing but 

still-developing regional commuter rail system, multiple well-established regional transportation 

planning agencies and a diverse timetable for construction of several intercity sections on the system. 

Additional ongoing responsibilities attend the need to help negotiate sensitivities around use of 

historic Union Station and development of a new hub transportation terminal in Anaheim.

As in other regions, the Southern California outreach team has worked closely with the PMT and 

regional management teams, regularly coordinating meetings, presentations, materials and personal 

contacts with scores of groups and events, including but not limited to (in alphabetical order):

•	 Access Los Angeles

•	 Alhambra Rotary Club

•	 American Planning Association – 

California Chapter

•	 Anaheim Green Expo

•	 Anaheim State of the City

•	 Anaheim Transportation Network Board

•	 Assemblymembers: Silva, Solario, Tran 

and Eng

•	 Beverly Hills Realtors Association

•	 Brookhurst Community Center

•	 Buena Park Senior Center Meeting

•	 Burbank Rotary Club

•	 CalTrans – District 11

•	 Chambers of Commerce of: Universal 

City, North Hollywood, Burbank, Quartz 

Hill, Montebello, Anaheim, OCBC, Los 

Angeles, Southeast Regional, City of 

Commerce Industrial Council, San 

Diego, San Fernando, VICA, Bell Gardens, 

Ontario and Riverside

•	 Cities of: Bell, Palmdale, Escondido, 

Tustin, Buena Park, Pomona, Temecula, 

Murrieta, San Bernardino, Rancho 

Cucamonga, Anaheim, Santa Clarita, 

Upland, Claremont, San Fernando, 

Burbank, Glendale, Orange, Montebello, 

Commerce, Pico Rivera and Los Angeles 

– more than 140 cities were briefed

•	 CMAA Owner’s Night

•	 County of San Bernardino

•	 Culver City Music Festival (July and August 

2008)

•	 Design Workshops conducted or 

participated in: Los Angeles, Norwalk, 

Vernon, Fullerton, Santa Fe Springs, La 

Mirada, Bell, Buena Park and El Monte

•	 Downey Kiwanis Club

•	 Downtown Los Angeles Neighborhood 

Council

•	 Earth Day Market Festival

•	 Electric Vehicle Association

•	 Fullerton Municipal Airport Noise & Safety 

Committee

•	 Fullerton Sunrise Rotary Club

•	 Gateway Cities Council of Governments

•	 Green LA Transportation Working Group

•	 Hollywood Community Police Advisory 

Board

•	 I-710 Technical Advisory Committee

•	 Knott’s Berry Farm

•	 LA-32 Neighborhood Council Meetings

•	 La Mirada Rotary Club

•	 Laguna Canyon Conservancy
63

•	 Lincoln Heights Neighborhood Council

•	 Little Tokyo Community Council

•	 Los Angeles City Council & LA City 

Council Ad Hoc Committee

•	 Los Angeles City – District 9 Planning 

Team

•	 Los Angeles Councilmembers

•	 Los Angeles County Metropolitan 

Transit Authority (MTA)

•	 Los Angeles Mayor’s Transportation 

Staff

•	 Los Angeles Parks & Recreation

•	 Los Angeles Regional Team Meeting

•	 Los Angeles County Supervisors

•	 Los Angeles Technical Group 

•	 LOSSAN Board

•	 Los Amigos

•	 LULAC

•	 METROLINK

•	 Metro Gold Line Construction Authority

•	 Palmdale/Antelope Valley Chamber of 

Commerce 

•	 Montebello Concert Series

•	 Mobility 21

•	 MOU Partnering Agencies for the SD-LA 

Section – SANDAG, SANBAG, SCAG, 

RCTC and SDRAA

•	 North Hills West NBHD Council

•	 Northridge West Neighborhood Council

•	 NRDC

•	 Ontario APA – Rebuilding America

•	 Point Loma Town Hall Meeting

•	 RailPAC

•	 Rio Honda Rotary Club of Bell Gardens

•	 Riverside County Transportation 

Commission

•	 Riverside County Supervisor Bob Buster

•	 San Bernardino Association of 

Governments

•	 SANDAG Transportation Committee

•	 San Diego Metropolitan Transit System 

(MTS)

•	 San Diego Regional Airport Authority

•	 San Gabriel Valley Economic 

Partnership

•	 San Gabriel Valley Council of 

Governments

•	 Santa Clarita Council Study 

•	 Southern California Association of 

Governments (and their Transportation 

Committee)

•	 Sierra Club

•	 SOAR Appreciation Night

•	 Southern California IT Professionals

•	 Southern California Transit Advocates

•	 STV-LA Union Station Webinar

•	 Los Angeles, San Diego, San Bernardino, 

Riverside and Orange County County 

Staff 

•	 Taxpayers’ Association Meeting

•	 Tustin-Santa Ana Rotary ClubVICA Local 

Officeholders Luncheon

•	 UCR Technical Team

•	 Urban Land Institute

•	 Women’s Environmental Council

•	 WTS Leadership and WTS Luncheon 

Other outreach efforts in this region include working with the Los Angeles mayor’s office to develop 

a working group meeting with appropriate city department heads as part of the environmental 

screening process and holding briefings for all transportation, city, and environmental agencies 

relevant to the project.
D E C E M B E R 2 0 0 9

64

Ridership, Revenue and Operations

The ridership of a high-speed 

train system, the revenue it brings 

in, and its operations costs are 

all interconnected. Balancing the 

three elements determines how 

viable the system is as a business 

enterprise. 

Ridership is a critical element. 

The Authority has previously sought 

ridership estimates of its planned 

system and is again working to 

develop updated ridership figures. 

Predicting ridership is a function 

of the state’s projected population, 

future gasoline prices and airfare 

costs, and numerous other factors 

related to the physical design of the 

train system. Ridership, of course, is 

a determining factor, along with the 

cost of operations and maintenance 

of the system, in developing 

revenue. These figures will be 

critical in developing interest from 

private investors in the California 

high-speed train project.

This section discusses these 

important elements of the project. 

The forecasts of high-speed train riders and revenue are 

developed from predicted future travel volumes and conditions 

within California, and future high-speed train operations 

planned. Being highly interdependent, the operations plans 

and the revenue forecast have been repeatedly refined to ensure 

consistency of assumptions and workability of the high-speed 

train service. 

At the very beginning, a preliminary operations plan was drawn 

up with stations in major cities and trains running as often as in 

overseas systems serving similarly sized cities. Train fares were 

assumed to be somewhere between the cost of driving and of 

taking an airplane or train. Parking costs at stations were set at 

prevailing levels, and transit services that could connect at the 

stations were identified. Running times between stations were 

calculated from the specifics of the rail line grades and curves, 

the power, weight of the train, and top speeds of 220 miles-perhour where the track is straight enough.

At the same time, a detailed picture of current and future 

trip-making in California without the high-speed train was 

developed. The volume of present travel among cities and rural 

regions was estimated from highway traffic counts, federal data 

on air trips, existing and new surveys of origins and destinations 

of trips, Caltrans data, and many other sources. The cost and 

speed of travel by air, car, and train, including getting to stations 

and airports and parking at destinations, was developed. Growth 

in traffic was projected from state forecasts of population, 

employment, and household income growth, and existing 

known relationships of these factors with travel volumes. 

The end result was a computer-based model with the state 

divided into 4,500 zones with population, employment, and 

types of household classified by size, income, number of cars 

and other characteristics relevant to the choice of travel by car, 

air, or train. The time and cost of travel to every one of the other 

zone is included, as well as the number of trips made between 

the zones. There are over 10 million zone-to-zone pairs in the 

model for which specific conditions of travel can be calculated.

High-speed train operating speeds and cost were then 

added as a travel option to each of the zone-to-zone pairs, 

and the number of trips attracted to the train was estimated. 

An extensive U.S. and international body of re-search and 

experience exists on why people pick cars, planes, transit, or 

other ways to travel for a specific trip. To develop the forecast 

model, over 4,000 existing surveys of California inter-regional 

travelers were combined with 2,700 new surveys collected in 

Overview of Forecasts and Operations Planning
65

2005 specifically to determine their sensitivity 

to cost, speed, and convenience. Zone-to-zone 

trips attracted to the high-speed train are 

summarized by 14 major markets for ease of 

understanding, and are assigned to stations and 

trains. 

The volume of high-speed train trips was then 

compared to the number of seats available 

in the operations plan. A relatively standard 

length of trains of around 660 feet has evolved 

in Europe and Asia. The number of seats 

ranges between 400 and 650, depending on 

seat spacing and whether the train is single or 

double level. Two sets can be coupled together 

to provide 800-1300 seats; the double trainset 

can be operated as a single. Where even two 

trainsets coupled together did not provide 

enough seats to carry the forecast traffic, trains 

were added to the preliminary operations 

plan. And where excess capacity was provided, 

consideration was given to reducing the 

frequency of service.

These changes in service can affect the 

attractiveness of the high-speed train, and to 

ensure compatibility, the ridership was reforecast when service patterns were changed. 

This process has produced an operating plan 

that has enough capacity to handle the forecast.

This forecast and operating plan for an initial 

phase of service between Anaheim and San 

Francisco are based on using single-level 

trainsets either singly with 450-500 seats each or 

two sets coupled together with 900-1,000 seats. 

In the year 2035, 270 trains operate throughout 

the day, in a mix of express non-stop service 

and shorter-distance limited service. The fastest 

running times meet legislative mandates, such 

as the 2 hours and 40 minutes time between 

San Francisco and Los Angeles. In the peak 

hours eight trains an hour are operating in 

each direction between Los Angeles and San 

Francisco, with another two trains an hour each 

way on the Merced segment, one to LA and 

the other to San Francisco. Four trains an hour 

in each direction would run through to/from 

Anaheim.

High-speed train fares are a key factor in the 

level of ridership and the revenue forecast. 

Forecasts for the programmatic EIR/EIS work 

used fares based on an LA–SF fare at half 

(50 percent) of the 2005 air fare, and varied 

proportionally with distance for other trips. This 

“50 percent” fare level generates relatively large 

passenger flows without requiring operating 

subsidy, and creates large public benefits 

from the public investment (e.g., air quality 

improvements, energy consumption reductions, 

and travel time savings). It also ensures that 

local and regional impacts of the high-speed 

train on items such as traffic, parking, sensitive 

lands, and water resources are not understated.

Tests of the sensitivity of riders and revenue to 

fare levels 33 percent higher and 66 percent 

higher than the “50 percent” base level showed 

progressively higher revenue, although lower 

ridership. The 66 percent higher case (which 

becomes the “83 percent” of air fare case) 

appears to be near the level that will generate 

the highest revenue, and reduces the operating 

costs and the number of trainsets needed. 

Because of the importance of increasing 

the amount of private sector funding in the 

construction and procurement of the project, 

the 83 percent fare scenario was adopted for 

this business plan. The fare is calculated in the 

same manner as the 50 percent, but is anchored 

by an LA-SF HST fare at 83 percent of the air fare, 

or in 2009 dollars a high-speed train fare of $105 

vs. a $125 air fare, and a $118 cost to drive. 

Riders and revenues are presented below for 

the year 2035, as well as for start-up in the year 

2020. Although early service may be possible 

on certain segments, no such revenues or 

operations have been included in this plan.

The remainder of this section presents more 

detail on the methodology and results for the 

ridership and revenue, the detailed operations 

plan, the operations costs, and the resulting 

cash flow for the initial phase between Anaheim 

and San Francisco.

Schematic Operations Plan for Ridership and 

Revenue Forecasting
66

In order to prepare a ridership and revenue 

forecast, a schematic operations plan is needed, 

providing how often trains will run, which 

stations they will stop at, and how long they 

take between station stops. This is done both for 

the peak morning and afternoon travel times, 

and for an off-peak period for the remainder of 

the day. Table A shows the schematic operations 

plan developed from ongoing ridership and 

operations planning for the initial phase 

of service in the peak period southbound. 

The northbound service plan mirrors the 

southbound.

 

This peak-period plan features different trains 

to serve the many different ridership markets 

in the initial service phase. Many different 

combinations are possible because of the 

flexible design of the alignment that lets express 

trains pass local trains in stations. This pattern 

has evolved incrementally and provides the 

highest ridership levels to date. An hourly 

non-stop train (pattern “0”) provides the 

fastest possible service between San Francisco 

downtown and Los Angeles downtown, taking 

2 hours and 40 minutes, the legislativelymandated time. A second San Francisco–

Anaheim express (Pattern “2”) provides rapid 

service to San Jose, and continues to Anaheim. 

Pattern “1” provides San Francisco and the mid 

and southern Peninsula stations with rapid 

service to Los Angeles, Norwalk, and Anaheim. 

Pattern “4” provides Fresno and Bakersfield 

with half-hourly semi-express service to San 

Jose, San Francisco, and Los Angeles. Pattern 

“6” serves the northern LA basin stations as 

well as the line to Orange County. Patterns “7” 

and “8” provide service to Merced from the Bay 

Area and from the south. In all, nine patterns 

of service are provided in this scenario, eight 

starting in San Francisco and one in Merced. 

It is designed to provide at least several trains 

per hour between all possible station pairs, 

while offering non-stop service between the 

major markets and a frequent mix of local and 

few-stop services within the constraints of the 

system’s capacity. 

This peak schematic pattern provides 57 trains 

in each direction in 6 hours, for an average of 

just under 10 trains per hour. The off-peak for 

the initial phase of service provides 71 trains in 

each direction over a 10-

hour period, for an average 

of 7 trains an hour.

For each pattern of service, 

the time for each train 

service was calculated from 

the curvature and grade 

of the current preferred 

programmatic EIR/EIS 

alignment, and the ability 

of a standard high-speed 

train set currently in 

revenue service elsewhere 

in the world to accelerate, 

maintain top speeds, 

and brake comfortably 

and safely. Time was 

added at stations for picking up and dropping 

off passengers depending on the expected 

size of the flows, and in some cases, to allow 

overtaking by express trains while stopped 

trains are at the station platforms. Finally, a little 

extra time was added to allow for unexpected 

delays in boarding or operation. This operations 

recovery time is equal to roughly 3.5 percent of 

the normal trip time. The resulting run times are 

realistic and achievable with high reliability and 

with the expected performance improvements 

from the next generation of high-speed trains 

being brought into revenue service in Europe 

and Asia.

TABLE A – Initial Section Schematic Operations Plan 

for Ridership Forecasting-Peak Period, Southbound
67

The high-speed trains operating on this pattern 

are assumed to be of the standard length of 

around 660 feet that has evolved in Europe and 

Asia, with a single level and seating comfortable 

by U.S. standards, resulting in either a single set 

with 450-500 seats, or two such sets coupled 

together, for a total seated capacity of 900-

1,000. At this schematic stage, capacity for 

each pattern was not specified, but the later 

matching of forecast ridership to a detailed 

timetable verified that this schematic pattern 

was able to accommodate growth in demand 

to 2035, as well as to provide full initial system 

service in earlier years.

Ridership and Revenue Forecasts

The high-speed line and stations are shown in 

the map below, along with fourteen regions 

into which the state was divided for purposes 

of reporting the results of the ridership and 

revenue forecast model. The model forecasts 

trips among 4,667 smaller zones for the 

year 2030, which are then factored to 2035 

by the projected growth in population and 

employment of the various regions of California.

Base forecasts of riders and revenue for the 

high-speed train were developed from 2005 
68

to 2009 by Cambridge Systematics (CS), a 

national leader in transportation economics and 

modeling, with extensive current experience in 

transportation issues throughout California. 

CS developed a detailed 4,667-zone model 

for the entire state to forecast travel between 

regions. The economic and household 

characteristics were forecast for each zone in 

the year 2030 based on data and forecasts from 

state, regional, and local government agencies. 

A detailed description of system capacity, 

speeds, service levels, cost, and traffic 

congestion for the highway and local transit 

networks was developed for 2030 from the 

fiscally constrained long-range transportation 

plans of each regional planning agency. 

Finally, future air and intercity conventional 

rail service reflecting current service levels and 

planned investments were incorporated. 

The high-speed train line and stations were 

added using fares, travel times between 

stations, and time between trains, provided by 

the Authority and validated by an independent 

peer review panel.

In 2005, data on travel conditions and patterns 

were collected from California agencies, and 

3,170 state-of-the-art surveys were taken of air, 

auto and intercity rail travelers who had recently 

made an intercity trip in California. 

The data were used to develop sensitivities for 

each of over 1,200 separate types of traveler and 

trip, involving combinations of:

•	 Purpose of the trip (Business, Commute, 

Recreation, and Other)

•	 Trip distance and size of metro area (More 

than 100 miles; less than 100 miles and 

from large metro area; less than 100 miles 

and from small areas)

•	 Household characteristics

– size (1 person, 2, 3, and 4 or more)

– income (low, medium, and high)

– autos owned (none, 1, and 2 or more)

– number of workers (0, 1, and 2 or more)

•	 Travel party size (alone, and with others)

For all travelers, cost, trip time, and frequency of 

departure are the more important variables, and 

reliability is a smaller, but significant, influence 

on the mode chosen to make a trip. 

For forecasting high-speed train travel within 

the greater LA Basin and the Bay Area, the 

existing urban transportation models for each 

of the regions were updated in 2008 and highspeed train service was added as an option. 

Travel within San Diego County was forecast 

using an extrapolation methodology because 

of the relatively low number of expected highspeed train trips.

A peer review panel of local, national, and 

international travel model and high-speed 

train experts reviewed and commented on 

the modeling assumptions, methodologies, 

and results during each stage of model 

development. The panel concurred with the 

approach and reasonableness of results.

In the year 2000, more than half a billion trips 

were made among California’s regions, 95 

percent by car, 4 percent by air, and 1 percent 

by intercity conventional rail, (San Joaquin, ACE, 

Capital Corridor and Pacific Surfliner). Between 

2000 and 2030, population is forecast to grow 

by 42 percent to 48 million, and employment 

will grow by about 51 percent. This growth will 

increase total interregional travel by 65 percent 

to 911 million trips a year, with auto keeping its 

lion’s share, but with a nearly five-fold increase 

in conventional rail trips.

The forecast population and economic growth 

will also increase travel within the three major 

metropolitan areas that have several high-speed 

train stations. Within the Los Angeles/Orange 

region, over 20 billion auto trips will be made 

in 2030, 34 percent more than in the year 2000, 

and conventional rail trips will grow five-fold. 

In 2030 the Bay Area will see over 7 billion auto 

trips and the San Diego region over 8 billion 

trips. Conventional rail traffic will grow much 

faster than auto trips but from a much smaller 

base.
69

Highway, transit and air capacity are not 

projected to keep pace with the expected 

increase in trip making, leading to increases 

in driving times within and between regions. 

In particular, peak period travel within and 

through major urban areas will take longer. 

Airplanes and trains are likely to become more 

crowded, and air travel times may continue to 

slow as airport congestion grows.

With high-speed trains in service in 2030, air 

travel will take about the same amount of time 

and be as frequent as it was in 2005. Air travelers 

will also continue to arrive at the terminal 

approximately 75 minutes before scheduled 

closing of airplane cabin doors as indicated 

in 2005 air traveler surveys. Flight reliability 

will also remain at 2005 levels, with about 95 

percent of flights arriving within an hour of 

schedule. The forecasts assume that high-speed 

train travelers will not face airport-style security 

checks and processing time, in line with practice 

in the Washington-New York-Boston 150-mph 

Acela train services, and all but one of the highspeed train services overseas19.

In 2030, Amtrak and other conventional rail trips 

between regions will take the same time and 

have as many trips as in 2005. The wait time for 

trains will be in line with the current 15 minutes, 

with no airport-style security measures. For rail 

service within regions, future running times and 

frequencies will be improved to the levels in 

each region’s long-range transportation plan. 

Baseline year 2030 air, auto, and conventional 

rail costs were developed based on the relative 

competitive situation of 2005 and assumptions 

about future trends as described below. 

A baseline high-speed train fare structure 

was set by the Authority and reviewed for 

reasonableness by an independent peer review 

panel.

The cost of driving is assumed to increase 

in line with general inflation, and to remain 

at 2008 levels (8 percent higher than the 

2005/6 levels in real terms, or 24 cents per 

mile for each auto traveler (2005 dollars) 

reflecting gasoline at just over $3 per gallon 

(2005 dollars). Bridge tolls were assumed to 

remain at 2005 real levels. Auto trips were 

assumed to pay market-based parking 

charges ranging from $0 to $35 per trip, 

depending on employment density at the 

destination. These driving and parking costs 

also apply to air, conventional rail and highspeed train travelers who drive a private 

vehicle or rental car from the station to/from 

their final destination.

Air fares were obtained for 2005 from the 

Federal Aviation Administration 10 percent 

sample of collected tickets for each of the 

airport pairs in California. Parking costs at 

airports were assumed to remain at their 

2005 levels in real terms. 

Conventional rail fares for the baseline 

in 2030 were assumed to be equal to the 

per-ride cost of a current multi-ride ticket, 

except for the Amtrak San Joaquin and 

Pacific Surfliner Routes, for which full oneway ticket costs were assumed. Parking 

costs at stations were assumed to be similar 

to 2005, in real terms. 

Baseline high-speed train fares for trips 

between regions were originally set so 

that the LA-to-San Francisco fare would 

be half of the average air fare from the LA 

Basin airports to Bay Area airports, or $55 in 

2005 dollars. Fares for other trips between 

regions were then calculated using a 

formula derived from this fare, with a fixed 

boarding charge of $15 plus a per-mile cost 

of 9 cents. For trips wholly within the Los 

Angeles Basin, San Diego County, or Bay 

Area, a lower fare was set with a $7 boarding 

fee plus 6 cents per mile.

Parking costs for inter-regional high-speed 

train travelers were set from $3 for the 

smaller, less urban stations to a high of $32 

for San Francisco Transbay Terminal. For 

interregional travel, parking was set at $3. 

Work is underway to better reflect actual 

market rates for private structured parking 

in mixed use areas similar to the anticipated 

development around each station and 

airports in the 2030-2035 horizon. 

19 Only the Paris-London service using the 20-mile English Channel Tunnel screens passengers and bags, because of the unique combination 

of length, shared use with freight trains carrying cars and trucks, and deep underwater factors.
70

Before actual revenue service begins, the 

Authority will make a decision on fares based on 

market conditions, including a determination 

of the point at which higher fares reduce 

ridership enough to be no longer cost-effective. 

For the 2009 business plan, we have chosen a 

single relatively high train fare for purposes of 

presenting a revenue and ridership scenario. 

Fares are assumed to be 83 percent of the 

average air fare for the LA-SF market, and other 

fares are set proportionally to distance20. This 

scenario generates more revenue than the 50 

percent of air fare scenario presented in the 

2008 business plan and the operating costs are 

lower, thus increasing the operating surplus. 

Additionally, fewer trainsets are needed to 

generate the revenue and the amount of private 

financing that could be attracted is increased. 

The resulting fares and air and auto costs are 

shown in Table B.

The 83 percent level is in the middle of a wide 

range of experience in similar-length markets 

outside of California, based on prices examined 

in 200721. At the top end, weekend Acela fares in 

the New York to Washington market were higher 

than air fares, and the Japanese Shinkansen 

fares were 108 percent of air fares for TokyoOsaka (322 miles) and 114 percent Tokyo-Hakata 

(722 miles). London – Paris Eurostar HST fares 

were 80 percent of air fares, both peak and offpeak. Madrid – Sevilla (333 miles) AVE fares were 

71 percent of air, and Paris Lyon (244 miles) 71 

percent of air. In the Paris Brussels market (191 

miles) where HST has 95 percent of the air/rail 

market, and airlines are primarily connecting 

to long-distance flights, (similar to Central 

Valley service to San Francisco or San Diego-Los 

Angeles flights) air fares are very high, and HST 

fares were only 39 percent of air fares. 

Fares for each trip continued to be expressed 

as a single average fare. Future modeling will 

reflect the ability to vary fares according to 

types of service and peak periods, in the way 

that air fares worldwide, high-speed train fares 

overseas, and Washington-New York-Boston 

train fares are varied today. Typically this will 

increase passenger revenue, encourage travel 

before or after peak traffic periods on less 

heavily loaded trains, and reduce operating 

costs due to peaking. It also has the advantage 

of making high-speed train travel more 

affordable to those willing and able to shift 

their travel in time and use trains that stop more 

frequently.

Additional work was done to extend the time 

horizon of the forecast to 2035 for purposes 

of the environmental analysis. Since most 

metropolitan 

planning entities 

in the state have 

not yet completed 

updating their longterm transportation 

plan from 2030 to 

2035, and some have 

not yet completed 

population and 

employment 

forecasting updates to 2035, the full model was 

not rebuilt, but a region-by-region forecast of 

growth was made from available government 

and private forecasts22 and applied to the model 

forecasts of 2030. Notably growth from 2030 to 

2035 is forecast to slow to below 1 percent per 

annum compared to 1.5 percent forecast for the 

prior decade.

Using this approach and assumptions, forecasts 

were developed for an initial phase of service 

between San Francisco, San Jose, the Central 

Valley (2including Merced), Los Angeles, and 

Anaheim. The riders are shown in Figure 1 for 

both the 50 percent and the 83 percent of air 

fare scenarios; the revenues are shown in Figure 

2. In addition to a year 2035 forecast, growth is 

shown from 2020, the first full year of service for 

the initial phase. 

20 However, the assessment of environmental impacts and mitigations continues to be based on the 50 percent scenario because it carries more riders and represents the reasonable 

maximum impact scenario required to be analyzed.

21 “HSR diversion of traffic from air,” Brand, N., working paper, July 5, 2009.

22 For AMBAG, MTC, Kern, and SCAG, forecasts of regional population, total employment, and households were obtained from the respective MPOs. Since 2035 MPO forecasts had either not 

been produced or adopted for the remaining regions; 2035 regional forecasts for those regions were developed using information from Woods and Poole Economics, Inc.

Table B
71

Figure 1 Passengers per year – 

Initial Phase 

 

Just as they have following startups of highspeed train services overseas, riders and 

revenues are assumed to ramp up from the first 

year of service to the 4th. From 2025 to 2035 

volume grows at the rates described in the 

previous paragraph. 

With fares at 50 percent of air, 58 million 

passengers are forecast in 2035; with the higher 

fares at 83 percent of air, 1/3 fewer passengers 

use the service, or 41 million per year. 

Figure 2 Revenues per year – 

Initial Phase 

But because fares increase more than riders 

decline, the 83 percent fare level produces 13 

percent more revenue, $2.87 billion in 2035 

(2009 dollars), compared to $2.4 billion for the 

50 percent fare scenario.

Interregional trips account for more than 70 

percent of the trips and 90 percent of the 

revenue, as seen in Table C. Local trips within 

the LA Basin and within the Bay Area are much 

shorter than between-region trips, and have 

a lower per-mile fare, which accounts for the 

lower revenue from each local traveler.
72

Table C RIDERS & REVENUES BY MARKET, INITIAL PHASE, 2035, Fares 83% of Air

Table D DAILY STATION BOARDINGS, INITIAL PHASE 2035, Fares 83% of Air 
73

Boardings by station by local and interregional 

travelers are shown in Table D. In the initial 

system San Francisco and Anaheim attract 

over 24,000 boardings daily with 80 percent 

interregional travelers. The second tier of 

stations includes Palmdale and Los Angeles 

Union Station with over 12,000 passengers 

boarding daily, more than half of whom make 

shorter trips within the Los Angeles Basin. 

The three Central Valley stations serve only 

interregional travelers, with between 4,700 

and 5,600 daily boardings. The other stations, 

ranging from San Jose with 7,500 boardings 

at the upper end, to Millbrae at the lower 

with 2,300 boardings, serve predominantly 

interregional travelers.

Table E shows the growth of riders and revenue 

by year. Riders and revenues are assumed to 

ramp up from 2020, the first full year of service 

to 2023, similar to start ups of high-speed rail 

service overseas. Until 2030, traffic volume 

continues to grow by 1.5 percent per year, and 

from 2030 to 2035 is forecast to slow to below 

1 percent per annum. Although not included in 

the table, some of initial phase sections may be 

able to start earlier in 2019, and would generate 

small amounts of riders and revenue.

Table E INITIAL PHASE RIDERS & REVENUE BY YEAR, Fares 83% of Air
74

The Detailed Operations Plan 

The detailed operations plan incorporates the schematic operating pattern shown earlier for ridership 

forecasting. The types of trains in the pattern (express, local, limited-stop) were arranged into a 

repeating hourly “clock-face” pattern to make the service more regular and predictable, and to reduce 

the number of different kinds of overtakings (i.e., express trains passing limited trains) that would 

be required. The minimum time between trains following each other past a given point was set at 

three minutes, based on the practical capacity of the signal and train control system. Overtakes were 

arranged at intermediate stations, with local stopping trains pulling off the main track to the platform, 

allowing the non-stop train to pass. Although stations stops were swapped among some of the local 

and limited stop trains to make the schedule work better, the service levels between station pairs 

were kept at the same level. Figure 3 shows a typical morning peak hour of the detailed operational 

timetable, running south from San Francisco Transbay and the spur from Merced joining the main line 

north of Fresno.

Figure 3 Initial Section Typical A.M. Peak Hour Timetable, Southbound
75

To help ensure that the timetable could be operated reliably and efficiently, a “string-line diagram” 

was plotted, showing the path of each train from start to finish (vertical axis) over time (horizontal 

axis). This diagram is especially useful in ensuring that express trains overtake local trains running in 

the same direction at a station. Figure 4 shows the morning’s start of operation on the main line in 

both directions between San Francisco (top) and Anaheim (bottom). A good example of overtaking 

is the first train from Anaheim (red line), leaving at 5:05 a.m. northward (up and to the right) to San 

Francisco. It overtakes a northbound local train (in yellow) that is stopped at Bakersfield at 6:20 a.m. 

(Incidentally, the first southbound train from Merced (green) passes through the station at the same 

time on the other express track.) The express also catches up to and overtakes a northbound (blue) 

train stopped at Gilroy at 6:35 a.m. Working with the timetable and stringline diagram produced a 

realistic detailed operational timetable for operations and the basis for estimating how many trainsets 

are required.

Determining the number of trainsets required 

for the service involved three separate 

calculations:

1. the basic number of trainsets 

needed to handle this timetable 

2. how many of those trainsets would 

need two sets to handle the ridership 

demand, and finally,

3. the number of sets needed to cover 

service while others are in periodic 

preventive maintenance as well as to 

provide back-up to cover mechanical 

and other problems

The basic number of trainsets to handle the 

timetable was calculated by assigning each 

departure to a specific trainset, noting the 

trainset arrives at the destination, and assigning 

it another departure in the other direction. 

At the start of the day, each departure will 

require a different trainset, but after several 

hours, trains will have arrived from the other 

end, and will be available to handle a departure 

after being inspected and cleaned. 

The standard minimum times needed at each 

station for disembarking passengers, trainset 

cleaning and safety work, and boarding a new 

load of passengers are shown in Figure 5. They 

are derived from high-speed train servicing 

requirements from overseas operators and 

manufacturers, U.S. practices in serving and 

marshalling customers, U.S. experience in 

organizing staff and their work, and likely U.S. 

regulatory requirements. They do not assume 

the large cleaning staff and race-car pit-stopstyle operation at peak hours in busy stub 

stations like Tokyo South, where up to 13 trains 

leave in one hour from two platforms. 

Figure 4 Initial Section String-line Diagram Excerpt
76

Trainsets arriving in the station from servicing at 

the maintenance facility, typically at the start of 

each peak, need only about half of this time in the 

station before departure.

Most trainsets are able to make 3-5 trips between 

the Bay Area and Los Angeles Basin in a day. 

Operations to Merced turn for the next available 

departure to the alternate terminal (i.e., a San 

Francisco-Merced train will turn for a MercedAnaheim train). A total of 65 trainsets are needed 

to handle the service, before accounting for second sets, spare sets to provide service in case of 

mechanical problems, and out-of-service maintenance needs. The next step was to determine how 

many trains required the doubling of capacity by coupling a second trainset. The forecast daily 2035 

ridership for the 83 percent fare scenario was distributed to each hour of the day, using factors from 

experience with high-volume rail traffic in the Northeast Corridor New York to Washington, highspeed services overseas, and California travel patterns. Separate factors were developed for the peak 

morning and afternoon hours, the hours before and after those peaks (“peak shoulder” hours), and 

off-peak hours.

Table F shows the percentage of traffic assigned to each of these hours for the three major high-speed 

train markets. To illustrate, interregional traffic, which is more evenly spread out through the day than 

traffic within the Bay Area or the LA Basin, has 12 percent of the day’s traffic assigned to each peak 

hour, whereas the more commuter-oriented local markets have 15-17 percent in each peak hour. 

Over half of the traffic is expected in the 6 peak hours for each of the market type, and the remainder 

is in the 10 off-peak hours. 

Higher capacity is needed in both the MTC and 

SCAG regions because a peak direction1 can 

be expected, based on existing flows of traffic. 

The strongest peaks are in the local MTC traffic, 

which is heavier out of San Francisco in the 

afternoon (and into the city in the morning) 

and requires 20% more seats than the average 

of both directions would have indicated. Traffic 

in the Los Angeles basin (SCAG ) is expected to 

need 10% more seats in one direction than the 

average. On the other hand, the inter-regional 

traffic is equally heavy in both directions at the 

peak, and no additional seats are required. The 

cumulative effect of these peaking assumptions 

is to require nearly three times as many seats at 

the peak hour in the peak direction as would be 

indicated by the use of an average hour during 

the day. 

For each of the three types of hours above, 

ridership was assigned to the available service 

patterns operating during those hours. Trips 

were first assigned to the fastest trains available, 

(i.e., Los Angeles–San Francisco passengers were 

23 Capacity was defined as 95 percent of the available seats at the peak point in a train’s trip, a reasonable average at this planning stage allowing for daily 

fluctuation. Use of demand management systems and capacity related-pricing will be needed to implement this, as is done today on HST and airlines worldwide.

Table F Ridership Peaking Factors for Capacity Calculations

Figure 5 Trainset Turnaround Time Assumed
77

assigned to the non-stop express train, 

San Jose to Anaheim to the two limited stop 

trains, Fresno–Norwalk to the pattern 28 

limited train and so forth). The loads were 

then compared to the capacity23 to determine 

whether one set (500 seats) or two (1,000 seats) 

were needed. 

Where this initial assignment resulted in even 

two-set trains being over capacity, the overflow 

passengers were reassigned to the next fastest 

trains with available seating capacity operating 

within the same hour.

Figure 6 shows the results of the loadings for a 

peak hour in 2035 when the traffic is heaviest. 

In all cases, passenger loads can be kept within 

the 1,000 seat capacity of a double trainset. 

The express services require double trainsets 

all day long. The Central Valley limited-stop 

trains and the Anaheim-Merced local trains also 

have sufficient peak passenger loads to require 

double trainsets. The all-stop local is at the 

edge of needing two sets, but the remaining 

services can be handled with a single trainset. 

Northbound services mirror the southbound 

with the a.m. and p.m. peaks reversed. 

Figure 6 Initial Section train loadings for peak evening hour southbound, 2035, HST Fares 83 % of Air
78

Figure 7 shows the same information for the 

off-peak service pattern and loadings, where 

it is clear that significant additional capacity 

is available. All off-peak trains other than 

the hourly limiteds have passenger loads 

under 95 percent of the 500 seats and can be 

accommodated on single set 660-foot-long 

trainsets. 

In all, 23 additional trainsets are required to 

provide double trainset operation with 1,000 

seats at the peak hours. When added to the 

base operating requirement of 67 sets, the total 

number of sets needed for service during the 

day is 90.

In addition to the sets needed for each day’s 

operations, additional sets must be available 

to account for the time that is needed to 

periodically inspect and maintain the trainsets, 

to perform less frequent but longer overhauls, 

and to a lesser extent, to provide spares to 

ensure operation in case of mechanical failure of 

a set. The conventional approach at this stage of 

planning is to add a number of sets calculated 

as a percent of the total, typically 10 percent. 

An additional check was made to ensure that 

the average number of miles operated by each 

trainset was reasonable given the specifics 

of the California operation, estimated as 

430,000 miles per set per year. This resulted in 

a requirement for an additional 10 sets to cover 

maintenance and operations protection needs 

in 2035, or a total of 100 trainsets in the fleet.

The operating plan was completed by 

identifying where trainsets would be stored 

overnight and at midday: some at stations, 

some in stations, and some in the maintenance 

facilities. Table G below shows the minimum 

requirements for overnight storage for the initial 

phase.

Figure 7 Initial Section train loadings for off-peak north & southbound, 2035, HST Fares 83% of Air
79

This snapshot of 2035 operations and trainset 

needs with fares at 83 percent of air was 

adapted to handle to handle much less traffic 

in the first years of service (2020-2022) as 

explained below. This particular operations plan 

clearly has much room for improvement from 

peak period pricing better matching of off-peak 

trains to the forecast loads, but the levels of 

activity that are shown provide a sufficient basis 

for the operating costs needed to handle the 

forecast level of traffic.

Extrapolation of the 2035 plan to the lower 

levels of traffic of earlier years was made by 

changing train miles, train-sets required, and 

trains operated in ratios related to the expected 

ridership. Table H shows the evolution of these 

variables. In the period from 2035 back to 2030, 

operations decrease 4 percent in line with the 

small change in passenger traffic. From 2030 

back to 2020, ridership is forecast to change 

more rapidly, at 1.5 percent lower each year 

due to the growth in population, employment, 

and personal income in California. Operations 

are decreased at half that rate, reflecting a 

greater difficulty of achieving a 1-for-1 change 

in operating cost in response to larger changes 

in ridership. Moreover, as a consequence of 

starting new service in a new market, ridership 

is assumed to ramp up in a manner observed 

with high-speed train service introductions 

overseas. In 2020, the first year of operation, 

traffic is assumed to be a further 60 percent 

lower than the 1.5 percent decrease per year 

from 2030. In the second year, the ramp up 

amount is 40 percent less; in the third year, 

2022, 20 percent less; and only in 2023 reaching 

100 percent of its forecast for the year. In each of 

those start-up years, the savings in operations 

are only half as large as the drop in ridership, (i.e. 

30 percent, 20 percent, and 10 percent lower 

than the steady state).

Table G Location for Overnight Storage, 2035, Initial Section, HST Fares 83% of Air

Table H Key operations parameters Initial 

 Phase, 2035, HST Fares 83% of Air
80

Operations, Costing & Cash Flow

The costs of operations and maintenance 

(O&M) are based on the statistics of the detailed 

operations plan just described; on California 

and U.S. costs and labor requirements; on 

California’s specific alignment, stations, and 

natural environment; and on experience of 

maintenance frequency and magnitude from 

high-speed rail systems throughout the world. 

How each of these was used is explained in the 

discussion of each component of the operating 

cost below.

Figure 8 Operations cost by year - 

 Initial Phase (2009$$)

Costs are first incurred in 2017, three years 

before revenue service begins, in order to test 

trainsets and systems at increasing speeds and 

with increasing frequency, and to ensure that 

all the high-speed train parts work together 

properly. Key technical staff is hired to help 

in the testing; they will be the nucleus of the 

operating and maintenance staff for day-to-day 

service. In 2019, the full staff needed for the 

first year’s operation is brought on board and 

the last half of the year sees train operations 

growing to the levels to be operated with 

passengers in 2020.

Operating costs strongly ramp up from 2020 to 

2023, with 65 percent of the 2030 operations 

cost incurred in the first year when 37 percent of 

the passenger traffic is expected, to 97 percent 

of 2030 when 90 percent of the passenger traffic 

is expected. In the following years, costs move 

up at 2/3 the rate of growth in operations, which 

itself is slightly slower than traffic growth until 

2030, and matching traffic growth after 2030. 

In each of these years a 5 percent contingency 

has been added for unknowns, in addition 

to contingencies on labor for overtime, 

consumables, and other non-routine expenses.

Calculation of the high-speed train operating 

cost uses an average cost per employee for the 

entire operation of $34 per hour (2009 dollars), 

resulting in an average salary of approximately 

$71,000, well above the average salary of the 

highest California metro area24, and only slightly 

below the wages of an average employee of 

the seven largest freight railroads in the US25. 

An additional 32 percent was assumed for total 

cost to the high-speed train operator, including 

Social Security, Medicare, and other government 

payments, health and savings plans, paid 

vacation, holidays and sick leave resulting in an 

all-in hourly rate of $45, equivalent to $93,60026

per year. In addition, a contingency was added 

to all labor costs of 15 percent for drivers and 

on-board train crew, and of 10 percent for all 

other labor. 

24 http://www.city-data.com/forum/general-u-s/318570-us-metro-areas-ranked-average-annual.html; need better, more direct reference to US Commerce Dept. Bu 

reau of Economic Analysis data.

25 “Class 1 Railroad Statistics”, American Association of Railroads, September 10, 2009 http://www.aar.org/~/media/AAR/Industry%20Info/Statistics%2020090910.ashx 

26 Class 1 freight railroad employee total compensation was 38 percent higher than the direct compensation per site above. The difference is primarily due to the 

higher cost of railroad retirement benefits, a legacy cost that is not expected to apply to HST employees.
81

Operations costs are estimated at 53 percent of total costs in 2035, and are divided into seven 

categories as shown in Table I.

Table I Initial Section Operating cost by category, 2035, HST fares 83% of Air

Train driving and staffing includes one driver per train and four crew members per trainset (i.e., eight 

for a double trainset train). The number of hours worked includes time spent driving and serving on 

the train, punching in, daily briefings, checking out the train, shut-down at the end of the day, training 

refreshers, time between trains and similar non-revenue service time. Train driving and staffing 

accounts for 9 percent of total cost.

Station services and security plus sales, marketing, and reservations include station management, 

ticketing and customer service representatives, security and crowd control staff, janitorial services, 

and other specialty services. Three shifts are manned by management and security, and two shifts 

of 10 hours are assumed for the full staff. Seventeen staff per shift are assumed at nine stations, 25 for 

the largest five stations. These two categories account for 11 percent of total cost.

Control center operations include a staff of eight persons for three shifts to plan for daily operations, 

to control train dispatching & power distribution, and to restore normal service in case of disruption.

General/Administration support for operations is calculated at 10 percent of the costs for the above 

categories amounts, with its own 10 percent labor contingency. Operations general/admininistration 

plus the control center operations account for 2 percent of total cost.
82

Power/Energy – w/Green Surcharge is calculated 

from costs of 17.5 cents per kwh (2009 dollars), 

3.5 cents of which cover the cost of using 100 

percent renewable energy sources. This average 

was derived from PG&E’s 2008 commercial 

rates in California. The rate is applied to power 

consumed by the trains, calculated for the 

specific California operating alignment and 

speeds from manufacturer and high-speed train 

operations information at 0.089 kw/seat mile, 

and to the much smaller power consumption of 

stations. Power accounts for 30 percent of the 

total cost. 

Insurance is assumed to be handled by the 

Authority and the state in the initial phase, 

through an owner-controlled insurance 

program (OCIP).

The maintenance costs of way (infrastructure, 

track, and systems), and vehicles are 

increasingly convergent, and a growing body 

of international evidence is being added to 

the U.S. experience. Costs in this model were 

drawn primarily from French experience with 

high-speed operations and maintenance, but 

are within the range of costs provided by other 

national railways and transport ministries27. 

Maintenance of way labor is based on ratios 

per mile of track or right-of-way, resulting in 

a total of nearly 340 personnel in multiple 

specialized mechanized teams over two 

shifts. For track maintenance, more labor and 

maintenance intensive ballasted track was 

assumed throughout because the extent of slab 

track on the California high-speed line has not 

been decided. Maintenance of way materials 

is based on percentages of the capital cost per 

year, varying according to the expected life of 

the investment, and with an allowance for tools 

and equipment. In total, maintenance of way 

accounts for 10 percent of the total cost.

Maintenance of trainsets and other vehicles is 

based on a materials cost of per-trainset mileper-year, for routine maintenance, and labor 

in two shifts spread throughout the facilities 

around the state. The heavy overhauls are 

costed with materials at $1.02 per trainset mile 

per year and additional staff in two shifts, all at 

the Central Valley heavy maintenance facility. 

An administrative staff of 120 persons is added 

as well. In total, 2,000 persons will be working 

on vehicle maintenance and cleaning. The 

maintenance of rolling stock category accounts 

for 33 percent of the total cost. 

Finally, a program contingency of 5 percent for 

unknown costs is added.

The costs are adjusted as explained above for 

lower levels of riders and activity in prior years, 

and with the addition of inflation of 3 percent 

per year, provided by the Authority’s financial 

consultant, results in the year of expenditure 

(YOE) cash flow shown in Table J below.

27 The maintenance costs are drawn from the professional and academic literature on HST maintenance costs, the experience within the PM team of HST 

costing in Taiwan, Korea, and the UK, and the CHSRA-hosted seminars by Japanese, French, German, and Spanish government and railway experts on the 

specifics of their high-speed railways, including maintenance practices and costs. High-speed train systems in Asia and Europe have seen a more-thanforty-year progression of experience in maintaining high-speed tracks, fixed systems, and infrastructure, and similar growth of experience in maintaining 

high-speed trainsets. Initially the original Japanese Shinkansen and the first French TGV exhibited numerous differences in trainset configuration, staffing, 

and material costs. However as both systems have expanded, other countries have built their own HST lines, and technical exchanges of best practice 

have diminished the focus on national systems, the approaches and costs have begun to converge. 

Table J 

Initial Phase Operating Results, 

83% of air fares, Year of Expenditure $$*

* Inflation 3% per 

year from 2009
83

Infrastructure Replacement 

Funding

In the public transit and U.S. conventional 

rail sectors, which typically do not generate 

operating surpluses for the operator (although 

they create significant public benefits), 

replacement of capital items is a public sector 

responsibility and cannot be financed from 

future cash flow of the operation. High-speed 

train services, on the other hand, generate 

positive cash flows around the world, including 

in the Northeast Corridor28 . As a result, 

28 Based on Federal GAO studies, the Pew Charitable Trust calculated $40.50 “profit” (i.e. positive cash flow) per passenger on Acela 

higher-speed services, after depreciation and other unallocated costs. See http://subsidyscope.com/transportation/amtrak/.

replacement of trainsets, 

signaling, overhead 

power systems, and other 

relatively short-lived 

25-30-year assets, can 

be financed from the 

future cash flow that they 

would produce, akin to 

corporate bonding of 

capital improvements in 

the private markets.

Nonetheless a prudent 

business plan should 

provide some reserve 

for capital replacement 

as well as for rainy day 

contingencies, and 

one approach is to set 

aside a portion of the 

cash flow. Replacing the 

25-30 year life elements 

of trainsets, signaling, 

communications, and 

catenary would cost 

roughly twice their 

YOE acquisition and 

installation cost, or in the 

range of $20 billion (2045 

dollars). 

 

In Table K, 20 percent 

of the net cash flow is 

set aside beginning in 

2031, 15 years before 

replacement of 25 year 

Table K Potential cash flow before and after capital replacement 

funds at 20 percent of surplus beginning 2031, YOE $$ in billions, initial 

phase, fare 83% of Air

assets would begin. Interest of 4 percent per 

year from the accumulated amounts adds to 

this fund each year. In total, this level of setaside would provide approximately $16 billion. 

The remaining 25 percent of the capital could 

be leveraged from the private sector with the 

by-then-well-demonstrated cash flow of the 

operation. Starting a set-aside part-way through 

the life of the asset increases early cash flows 

to the operator, and increases the potential for 

private sector investment. See Table K below. 
D E C E M B E R 2 0 0 9

84

Cost of the System

The most recent prior estimate 

of the capital cost of the San 

Francisco-to-Anaheim high-speed 

rail system was expressed in 

2008-year dollars at approximately 

$33.6 billion. The following section 

will for the first time describe 

the estimated cost of the project 

in year-of-expenditure (YOE) 

dollars, as was required in the 

application for American Recovery 

and Reinvestment Act funds, and 

as compares to the $9 billion in 

bond funds made available by the 

passage of Proposition 1A. This way 

of preparing the estimate provides 

a more credible view of the cost of 

the project in the year in which it 

is expected to be constructed, and 

the projected cash flow by year. 

The updated cost estimate 

for the San Francisco-to-Anaheim 

initial high-speed rail system 

in current year dollars is $35.7 

billion. This reflects inflation costs 

between 2008 and 2009, as well 

as section cost updates. Adjusting 

the project cost for YOE dollars 

brings an updated cost estimate 

of $42.6 billion. Almost 80 percent 

of that cost change is attributable 

to inflation. In other words, only 

about 20 percent of the estimated 

cost increase is due to real cost 

growth due to refinements in 

estimated unit costs and updated 

quantities attributable to updated 

section configurations and to other 

revisions described below. 

The capital costs of the San Francisco-Anaheim portion of the 

high-speed train system were updated from the 2008 Business 

Plan estimate to reflect refinements in assumptions, better 

information, cost escalation from 2008-2009 and projected cost 

escalation from 2009 to the projected year of expenditure. The 

cost estimate tables shown below provide details. 

•	 Table 1 provides a breakdown of estimated 

infrastructure capital costs, by section, plus estimated 

rolling stock costs.

•	 Table 2 provides estimates of capital costs by year of 

expenditure by major cost category.

•	 Table 3 provides the same information as Table but 

by section. Table 4 provides program implementation 

costs including the cost of environmental work and 

program management. 

•	 An additional table shows a cost estimate comparison 

from 2008 to 2009 dollars and to Year-of-Expenditure 

Dollars by section and total for the San Francisco to 

Anaheim portion of the system. A description of the cost 

increases/decreases from 2008-2009 is provided in the 

“Regional Section Cost Updates” section below. The 

footnotes to this third table are important to note:

• Updated cost estimate in 2009$ includes an 

estimated $711 million in escalation over 2008$ 

(2.4%). In real dollar terms, the estimated cost growth 

from 2008 to 2009 is 7.2%.

• The San Francisco-San Jose estimate includes an 

allowance of approximately $1 billion for the CHSTP 

contribution to the Transbay Terminal cost.

• Year-of-Expenditure costs were computed by 

distributing and escalating the 2009$ estimate for 

each section to the year of planned expenditure. 

(See accompanying Cash Flow charts for details.)

Cost Estimate Summary
The methodology and assumptions used in preparing these cost estimates follow these tables. 

85
86
87

Methodology and Assumptions

INTRODUCTION

The projected capital costs of the California 

High-Speed Train Project were last updated 

in preparation of the 2008 Business Plan and 

reflected preferred alignment as was established 

by the Programmatic EIR/EIS documents 

approved by the Authority and FRA in 2005 and 

2008. As work on project-specific EIR documents 

and 15 percent level design is being advanced 

forward by the Regional Consultants, the capital 

costs were updated to reflect the current project 

configuration. This capital cost update will cover 

the initial phase of the system broken down in 

the following sections:

•	 San Francisco to San Jose

•	 San Jose to Merced

•	 Merced to Fresno

•	 Fresno to Bakersfield

•	 Bakersfield to Palmdale

•	 Palmdale to Los Angeles

•	 Los Angeles to Anaheim

QUANTITIES UPDATE

The estimate is structured to collect quantities 

on major work items in the following cost 

categories:

•	 Track Items

•	 Earthwork Items

•	 Structures, Tunnels, Walls

•	 Grade Separations

•	 Building Items

•	 Rail and Utility Relocation

•	 Right-of-Way Items

•	 Environmental Mitigation

•	 Systems Items

•	 Electrification Items

Each cost category is further divided in to 

specific cost elements represented in linear, 

area, volumetric or each units of measure. 

Regional Consultants have estimated quantities 

of individual cost elements based on current 

level of design of each respective segment. 

Depending on the engineering advancement 

of each segment, the level of quantity updates 

varied accordingly.

UNIT COSTS

The unit costs used in this estimate represent 

composite costs of each work element derived 

from detailed estimates of similar work elements 

constructed as part of major freeway, urban 

rail transit and water infrastructure projects 

in California. In January 2009, the unit costs 

were independently reviewed and updated by 

the PMT from the 2008 estimate to be more 

reflective of current conditions and are the basis 

of this update. Unit cost estimates of 77 different 

cost items were developed and applied:

•	 Track - 11 items

•	 Earthwork - 8 items

•	 Structures, Tunnels, Walls - 18 items

•	 Grade Separations - 8 items

•	 Buildings - 5 items

•	 Rail and Utility Relocation - 8 items

•	 Right of Way - 10 items

•	 Environmental Mitigation - 1 item

•	 System - 3 items

•	 Electrification - 2 items

•	 Other - 3 items

Each of the items is supported by a set of 

back-up sheets that provide the basis of the 

unit price, including sources, assumptions, 

and other adjustments. While it varies from 

item to item, each item also includes a further 

breakdown of costs to develop the unit price. 

For example, a Track Section item would consist 

of sub-ballast, ballast/ties/fasteners/rail, and 

drainage elements. The composite unit costs are 

each based on detailed estimates containing 

on average 15 specific sub-unit costs from a 

unit cost data pool of over 1,100 items that 

ultimately support the capital cost estimate. 

CONTINGENCIES

This estimate update continues to be 

preliminary in nature, reflecting design levels 

that vary between concept levels through 

approaching 15 percent level. Therefore, there 
88

are many work elements that are lacking 

quantitative definition at this time, thus 

requiring contingency reserves to account for 

these costs. In general, 30 percent contingency 

level has been assigned to all of the cost 

categories with an exception of the following 

cost categories that have been assigned 20 

percent level of contingencies:

•	 Track 

•	 Systems Items

•	 Electrification 

This reduction in contingency levels on the 

cost categories listed above is attributed to 

more detailed definition of the scope of work 

and the quantity. In addition, further 5 percent 

reduction in assumed levels of construction 

contingencies were taken on earthwork 

cost categories specifically in the following 

segments to account for economy of scale and 

unrestricted access to the alignment in the areas 

of earthmoving operations:

•	 San Jose to Merced

•	 Bakersfield to Palmdale

•	 Palmdale to Los Angeles

IMPLEMENTATION COSTS

Engineering, management and administrative 

costs associated with program implementation 

have been estimated as following percentages 

of the total construction costs (including 

contingencies but excluding right-of-way costs):

•	 Program Management – 3.5 percent

•	 Environmental / Preliminary Engineering 

– 2.5 percent

•	 Final Design – 4.5 percent

•	 Construction Management – 4.0 percent

•	 Agency Costs – 0.5 percent

It should be noted that final design costs are 

considered to be part of the construction costs 

and reflected in construction costs subtotal, 

while the rest of the implementation costs 

are presented as a separate cost category. 

There are no contingencies applied on the 

implementation costs.

VEHICLES COSTS

The costs of vehicles is established based 

on publicly available data on recent sales 

of comparable equipment to other highspeed rail undertakings around the world 

as well as based on informal consultations 

with the manufacturers. The costs of vehicle 

procurement have been divided in to two parts:

•	 Opening Day demand (assumed 60 

trainsets at 2020)

•	 Optional Orders based on increasing 

ridership demand (assumed 40 trainsets 

between 2025 and 2035)

The costs of vehicles required for the 

Opening Day included an escalation to the 

year of contract procurement (2011) by 6.61 

percent (two years at 3.0 percent and 3.5 

percent annual inflation rates). The payment 

schedule to the vehicle manufacturer reflects 

anticipated manufacturer annual costs; (i.e., no 

manufacturer financing is assumed). 

The option order price of $34.8 million per 

trainset for the 40 additional trainsets (the 

assumed price negotiated at the time the base 

order is placed) includes a 16 percent escalation 

factor over 2009 costs.

INFLATION

Published Cost Index Data

In review of the Engineering New Record 

(ENR) published Construction Cost Index (CCI) 

inflation recorded between August of 2008 and 

August 2009 are:

CCI (Aug, 2008) = 8362

CCI (Aug, 2009) = 8564

The resulting recorded inflation rate between 

2008 and 2009 based on ENR CCI is 2.42 percent. 

Also, as a check, California Construction Cost 

Index (CCCI) was reviewed for the same time 

period:
89

CCCI (Aug, 2008) = 5142

CCCI (Aug, 2009) = 5265

The resulting recorded inflation rate between 

2008 and 2009 based on CCCI is 2.39 percent.

The assumed rate inflation between years 2008 

and 2009 in this estimate update is 2.40 percent.

Forecasted Inflation Rates

Following IMG Team’s recommendation to 

the Authority regarding long-term annual 

construction cost inflation of 3.50 percent, and 

taking into account recorded construction 

inflation rates, the following inflation rates were 

assumed:

2009 to 2010 – 3.0 percent

2010 and on – 3.5 percent

YEAR OF EXPENDITURE COSTS

The cost estimate is compiled in 2009 dollars 

designated as a Base Year. Based on projected 

ROD/NOD dates for each segment, expected 

construction durations and generally accepted 

sequence of major construction activities, 

the Base Year costs were distributed across 

implementation years while escalating each 

allocation from the Base Year dollars to each 

respective Year of Expenditure dollars. The 

summation of all distributed and escalated 

costs for each cost category results in total 

Year of Expenditure cost. There was no further 

escalation assigned on the vehicle costs beyond 

what was described above in Vehicles Costs.

Section Cost Updates
90

The Cost Comparison Table on the previous 

page lists the estimated increases and decreases 

in costs from the 2008 estimate to the current 

estimate. A brief summary of what was behind 

these changes in cost estimate by Section is 

provided below.

San Francisco – San Jose

The net cost increase in this segment is $631 

million principally attributed to the following 

items:

•	 higher trackwork costs to reflect an 

increase in composite unit costs ($160 

million)

•	 increase in aerial structure quantity 

and increase in projected unit costs 

($1,144 million) (Note: this cost is 

more than offset by a reduction in the 

number of grade separations ($1,350 

million decrease)

•	 increase in right-of-way acquisition 

cost, principally for the maintenance 

facility ($337 million)

•	 increase in building costs due to 

moving the cost of Diridon Station into 

the San Francisco-to-San Jose section 

and retrofitting of 3 Caltrain stations 

($211 million)

•	 increase in rail and utility relocation 

costs due to relocation/removal 

of existing tracks and major utility 

relocation within the corridor ($219 

million)

•	 increase in electrification costs due 

to adjusted composite unit costs ($36 

million)

•	 decrease in earthwork volumes ($125 

million decrease)

San Jose – Merced via Pacheco Pass

(Preferred Alternative, additional work 

underway on Program EIR)

The capital cost of this segment has decreased 

in aggregate by $21 million compared to 2008. 

This decrease is attributed to the following:

•	 Moving cost of Diridon Station and 

Light Maintenance Facility out of 

San Jose-to-Merced section and into 

San Francisco-to-San Jose section

•	 Update of right-of-way quantities

•	 Update of unit costs;

Merced – Bakersfield

The capital cost of this segment has decreased 

in aggregate by $162 million compared to 2008. 

This decrease is attributed to the update of unit 

costs, specifically reduction in projected costs of 

undeveloped land.

Bakersfield – Palmdale

The capital cost of this segment has decreased 

in aggregate by $190 million compared to 2008. 

This decrease is attributed to the update of unit 

costs, specifically reduction in projected costs of 

undeveloped land.

Palmdale – Los Angeles

The total cost increase in this segment is $336 

million, principally attributed to the increases 

in the composite unit costs for trackwork 

and structures offset by reduction in grade 

separation costs and shifting the LA Union 

Station cost to the Los Angeles-to-Anaheim 

section.

Los Angeles – Anaheim

The total cost increase in this segment is $2,446 

million due to major changes in scope as 

following:

•	 increase in single track construction 

to accommodate “4+2” corridor 

configuration ($133 million), 

also combined with increases in 

composite unit costs

•	 increase in earthwork costs reflecting 

additional cost of urban demolition 

associated with additional right-ofway acquisitions in support of “4+2” 

track configuration ($51 million)
91

•	 increase in aerial structure quantities 

and addition of twin bore and cut 

and cover tunnels, also compound 

by increase in composite unit costs 

($1,095 million)

•	 increase in building costs associated 

with addition of LA Union Station 

(LAUS) to this segment, and additional 

costs for traffic mitigation and site 

development at LAUS, Norwalk, and 

Anaheim stations ($507 million)

•	 increase in rail and utility relocation 

costs due to relocation/removal of 

existing tracks and high voltage 

power line relocations within the 

corridor ($280 million)

•	 increase in cost of anticipated 

environmental mitigation due to 

overall increase of construction costs 

($161 million)

•	 increase in right-of-way costs 

to account for land acquisitions 

in support of “4+2” corridor 

configuration and maintenance 

facility site ($334 million)

These increases are offset by decreases in grade 

separation costs due to reclassification of grade 

separation types from urban to suburban types 

($120 million)
D E C E M B E R 2 0 0 9

92

Paying for the System

California has a unique 

opportunity in that it is armed with 

a $9 billion, voter-approved, general 

obligation bond to provide critical 

state proceeds for high-speed rail 

construction. The following financial 

plan will outline each of the various 

funding sources with details on the 

Authority’s financial assumptions, 

including the $9 billion from state 

funds available through Proposition 

1A; approximately $17-$19 billion 

in federal funding that includes, 

in part, money from the American 

Recovery and Reinvestment Act; 

$4-$5 billion in local support and 

through public-private partnerships 

(P3s) such as transit-oriented 

development, parking concessions 

and naming rights opportunities; 

and $10-$12 billion in P3 funding. 

As outlined in previous sections, the 

cost of that system in this financial 

plan is adjusted for the year when 

costs will actually be expended, 

allowing the Authority to have a 

more accurate projection of the 

overall costs in the year funds will 

be needed. 

California faces a unique opportunity to create one of the first 

high-speed rail systems in the country. The state is armed with a 

$9 billion, voter-approved, general obligation bond to provide 

critical state proceeds for high-speed rail construction. In 

addition, the $8 billion appropriated by the American Recovery 

and Reinvestment Act (ARRA) dramatically changed the funding 

landscape for high-speed and intercity passenger rail in the 

United States. California’s high-speed rail financial plan focuses 

on four primary funding sources for the initial San Francisco-toAnaheim portion of the project: state, federal, local and private. 

The following financial plan will outline each of the various 

funding sources with details on the Authority’s financial 

assumptions. This includes $9 billion from state funds, available 

through the Safe, Reliable High-Speed Passenger Train Bond Act 

for the 21st Century, approved by California voters as Proposition 

1A in 2008. The Authority is also seeking approximately $17-

$19 billion in federal funding. Part of the overall federal input 

includes the American Recovery and Reinvestment Act (ARRA) 

based on the Authority’s recently submitted ARRA application 

totaling $4.7 billion for four different construction sections and 

additional environmental and engineering funds. The Authority 

is targeting $4-$5 billion in local support and through publicprivate partnerships (P3s) such as transit-oriented development, 

parking concessions and naming rights opportunities.

As demonstrated in the previous section on ridership and 

revenue, the initial San Francisco-to-Anaheim portion of the 

project is expected to generate significant operating surpluses 

even after accounting for operations and maintenance costs 

and renewal and replacement reserves. This dedicated and 

significant revenue stream after full San Francisco-to-Anaheim 

operation begins will provide the Authority with an opportunity 

to seek innovative P3s to provide capital funding to help 

complete the system. The Authority is targeting $10-$12 billion 

in P3 funding. 

As outlined in previous sections, the cost of that system, 

adjusted for the year when projects will actually be constructed 

(year of expenditure dollars or YOE), and taking into account 

project changes outlined in the previous chapter, is estimated 

by the Authority to be $42.6 billion. This allows the Authority to 

have a more accurate projection of the overall costs in the year 

funds will be needed. 

Financial Plan Overview
93

A detailed look at the Authority’s Financial Plan for building the high-speed train project follows.

State Funding

Introduction

The State of California historically has played 

a major role in the development of passenger 

rail service in California. Consistent with this 

role, the Financial Plan for the San Francisco-toAnaheim portion of the California High-Speed 

Rail Project anticipates $9 billion in state funds 

for its development. The source of state support 

has come from the Safe, Reliable High-Speed 

Passenger Train Bond Act for the 21st Century 

(the Bond Act)29, which voters approved in 

November 2008. The passage of the Bond Act 

demonstrated California’s financial and political 

commitment for the high-speed train, which are 

critical in generating necessary financial support 

from federal, local and private sources.

Bond Measure

The Bond Act, Proposition 1A on the November 

4, 2008 California ballot, authorized the state to 

issue $9.95 billion of general obligation bonds, 

$9 billion of which would be used to develop 

a high-speed train system. The remaining 

$950 million raised under the Bond Act will be 

allocated for capital improvements to commuter 

and intercity rail lines, which will connect to the 

high-speed train system. 

29 http://www.cahighspeedrail.ca.gov/images/chsr/20081118153017_Source%20Document%2010%20AB%203034.pdf

Bond Provisions Summary

As specified in the Bond Act, bond proceeds may be used for preliminary engineering, right-of-way 

acquisition, and the construction of tracks, structures, power systems and stations. Additionally, rolling 

stock and related equipment, as well as other capital-related facilities and equipment can be purchased 

with these funds. However, proceeds of bonds described above shall not be used for more than 50 

percent of the total cost of construction of each corridor or usable segment thereof of the high-speed 

train system. In addition, the Bond Act establishes caps on the amount of funds that can be expended for 

preliminary engineering, planning and environmental studies to 10 percent of proceeds and not more 

than 2.5 percent on administrative expenses (subject to increase by the Legislature, up to 5 percent). 

The bill requires that, among other considerations, the Authority gives priority in selecting corridors that 

are expected to require the least amount of bond funds as a percentage of total cost of construction. 

Additional details on the Bond Act can be found at the link below.
94

Plan to Leverage the State’s dollars

The Bond Act passage represents a significant 

and important investment in high-speed rail 

development as California voters approved the 

measure. The Authority plans to leverage these 

critical bond proceeds to match federal grant 

funds, local investment as well as potential 

private sector interest. The Authority’s ARRA 

grant application, for example, proposes a 50 

percent match to federal grant funds, which 

could include state, local and other funding as 

matching sources. The state was able to propose 

this dollar-for-dollar match offer because of 

the existence of the Bond Act funds, and the 

Authority believes this offer makes California’s 

application more competitive than those of 

other states to win a significant portion of the 

ARRA funds.

Federal Funding

Introduction

Federal support, both financial and regulatory, 

is a key component to the success of California’s 

high-speed train project. The financing plan for 

the San Francisco-to-Anaheim system targets 

approximately $17-$19 billion from federal 

sources. Although a portion of this funding 

may come from existing federal transportation 

programs, including the Passenger Rail 

Investment and Improvement Act (PRIIA), the 

creation of new programs designed specifically 

to advance high-speed rail projects will likely be 

necessary to achieve this level of support. 

This section will explain the basis for the 

targeted $17-19 billion from federal sources. 

Federal funding sources will likely be drawn 

upon during the early stages of the project, as 

the majority of private sector support is likely 

to occur only after much of the targeted federal 

funding has been secured. 

The development of specific 

federal high-speed train 

programs or the commitment 

of federal funds for California’s 

high-speed train project, in 

particular, are key signals that 

would encourage private 

participation in the project.

Historically, federal funds have 

supported approximately 

50 to 80 percent of many 

major transportation projects 

including highway, transit, 

and aviation sector related 

projects. In the early years of 

transit funding, developing 

transit programs was a federal 

priority and funding for such 

projects was approximately 

80 percent federal. Although 

the scale of California’s high-
95

speed train project is much larger than a typical 

major transportation project, there is precedent 

for substantial federal support for large and 

nationally significant transportation projects. 

In addition, the authorizing grant program 

established in Section 501 of PRIIA sets the 

statutory maximum federal contribution at 80 

percent. 

ARRA Projects and Funding Plan

A critical and immediate piece of federal 

funding was granted during the American 

Recovery and Reinvestment Act (ARRA)30, which 

appropriated $8 billion to high-speed rail, 

intercity rail and congestion grants. This opened 

the door to fund major corridor development as 

well as environmental and planning programs 

for high-speed and intercity rail corridors 

throughout the country. 

The Authority has requested ARRA funding 

assistance for a subset of independent utility 

projects that will help to further the Authority’s 

longer-term goal of establishing service from 

San Francisco-to-Anaheim. All of these projects 

were under the FRA’s “Track 2” umbrella, which 

allows for construction to be completed by 

2017. This has a longer time frame than the 

“stimulus” portions of this provision (“Track 

1”) to allow states the necessary lead and 

construction time to successfully complete 

these projects. 

The costs for the Authority’s “Track 2” sections 

totals $9.459 billion in YOE dollars. The Authority 

requested a 50 percent federal funding share 

for each of these projects and providing a 50 

percent match with state, local or other sources. 

As outlined in the table on the previous page , 

for the $553 million in PE/NEPA/CEQA projects, 

the Authority plans to match $276.5 million in 

federal funds with an equal amount of state 

bond funds. For the $8.906 billion in designbuild projects, the Authority proposes to match 

$4.453 billion in federal funds with local and 

private funding as part of the $4.453 billion 

match in addition to state bond proceeds.

As explained in the previous chapters, 

successful receipt of federal funding would 

result in the completion of much of the required 

environmental and engineering work necessary 

for the initial San Francisco-to-Anaheim project 

as well as the construction of a substantial 

portion of the underlying infrastructure. The 

federal ARRA funding is consistent with the 

Authority’s plan of funding the initial project 

with a combination of federal, state, local, and 

private funding. 

Existing Federal Programs and Available 

Funding

The American Recovery and Reinvestment Act 

(ARRA) dramatically changed the landscape for 

high-speed rail funding in the United States. 

Prior to ARRA’s passage, funding for high-speed 

trains was limited to an authorized $1.5 billion 

in PRIIA. ARRA appropriated $8 billion to three 

different grant programs within PRIIA including 

the high-speed rail program. In addition to 

the authorizing grant mechanism under 

PRIIA, relevant federal programs that could 

provide support to high-speed trains include 

the Transportation Infrastructure Finance and 

Innovation Act of 1998 (TIFIA), the Railroad 

Rehabilitation and Improvement Financing 

Program (RRIF), and Private Activity Bonds 

(PABs).

Key Grant Program Mechanism

Passenger Rail Investment and Improvement 

Act (PRIIA or P.L 110-432)

Signed into law on October 16, 2008, PRIIA 

primarily authorizes appropriations for Amtrak 

over the next five years. However, the law also 

includes language that created the first grant 

mechanism for high-speed passenger rail and 

it authorized $1.5 billion in grants over five 

years for high-speed rail corridor development 

to states or Amtrak to finance the construction 

and equipment for California and 10 other 

federally designated high-speed rail corridors 

under Title 5 (PRIIA Section 501). The federal 

30 See the FRA’s “Interim Program Guidance” at www.fra.dot.gov/us/content/2243 for additional details
96

share for these projects is capped at 80 percent 

with the Secretary of Transportation awarding 

these grants on a competitive basis based on 

economic performance, expected ridership, 

and other factors. The ARRA appropriation 

of $8 billion used the grant mechanism 

established under Section 501. PRIIA’s Section 

501 represents the first federal grant program 

dedicated to high-speed rail funding. 

Federal High-Speed Rail 

Appropriations

ARRA appropriated $8 billion to three 

different grant vehicles authorized under 

PRIIA (described below). This represented the 

first appropriated funds to high-speed rail 

development for the country. The maximum 

federal contribution outlined in the statute 

could be a maximum of 100 percent. However, 

the Authority’s board voted to propose a 

dollar-for-dollar match with federal grant funds. 

The Authority submitted a grant application 

for “Track 2” funds under the High-Speed and 

Intercity Passenger Rail program totaling $4.7 

billion. As mentioned above, the Authority 

selected projects based on the ARRA funding 

requirements for its ARRA application. 

Annual Appropriations

In addition to ARRA, the President’s January 

FY2010 Budget proposed an additional $1 

billion per year over a five-year period for 

investment in high-speed trains nationally. The 

President’s proposal demonstrates significant 

support for their development. The House and 

Senate have taken the President’s proposed 

$1 billion annually and recommended $4 

billion in the House transportation bill and $1.2 

billion in the Senate. The House bill includes 

the possibility of shifting $2 billion (of the $4 

billion) to a National Infrastructure Bank should 

one be created. These proposals have passed 

their respective chambers and are awaiting 

Conference Committee meetings. 

Innovative Finance and Loan 

Programs

The Authority’s plan of finance includes 

grant funding for the major federal funding 

components and innovative finance 

mechanisms for the P3 piece. The federal 

government currently sponsors a few different 

innovative finance programs that could be 

useful to the Authority as it seeks P3 funding 

for the project. The following innovative finance 

and loan programs represent mechanisms 

that the Authority or a P3 concessionaire may 

employ to reduce the cost of borrowing. 

Transportation Infrastructure Finance and 

Innovation Act of 1998 (TIFIA)

TIFIA is an established federal credit assistance 

program for eligible transportation projects 

of national or regional significance. These 

include transit and passenger rail facilities, 

such as the California project. Under TIFIA, 

the U.S. Department of Transportation (DOT) 

can provide three forms of credit assistance 

to eligible projects. These means of assistance 

include secured (or direct) loans, loan 

guarantees, and standby lines of credit. 

The fundamental goal of TIFIA is to leverage 

federal funds to attract substantial private and 

other non-federal co-investment into projects 

that provide critical improvements to U.S. 

surface transportation. Principal amounts of 

credit assistance provided by TIFIA are limited to 

33 percent of eligible project costs. Additionally, 

interest rates for TIFIA loans generally reflect the 

government’s borrowing costs, and the terms 

of repayment are generally favorable to project 

sponsors.

The Authority’s Financial Plan envisions the 

use of the TIFIA loan program as subordinate 

debt for the P3 portion of the program funding. 

Further details on assumptions and possible 
97

uses of TIFA are provided in further detail in the 

P3 section of this chapter. 

Railroad Rehabilitation and Improvement 

Financing Program (RRIF)

The RRIF program is a revolving loan and loan 

guarantee program that is administered by 

the Federal Railroad Administration (FRA). 

It is legislatively enabled to issue up to $35 

billion in loans. The program originally was 

established by the Transportation Equity Act for 

the 21st Century (TEA-21), and was amended 

by the Safe Accountable, Flexible and Efficient 

Transportation Act: a Legacy for Users (SAFETEALU). 

Funding from RRIF may be used to acquire, 

improve or rehabilitate intermodal or rail 

equipment or facilities, including track, 

components of track, bridges, yards, buildings, 

and shops. Funds also may refinance 

outstanding debt incurred for those purposes 

listed previously, or may be allocated to develop 

or establish new intermodal railroad facilities. 

Attractive interest rates, similar to those 

available under TIFIA, also exist under RRIF. 

This program is able to fund up to 100 percent 

of a project’s costs, allows for a five-year grace 

period, and requires the payment of an up-front 

risk premium. 

As RRIF is typically senior debt, a RRIF loan could 

be combined with a TIFIA subordinate loan. 

It is important to note that these sources are 

loans and will need to be repaid. The Authority’s 

Financial Plan includes scenarios that assume 

a possible combination of RRIF and TIFIA loans 

as both senior and subordinated debt under 

the P3 funding package. The maximum TIFIA 

contribution is 33 percent of total project costs. 

Private Activity Bonds (PABs)

Private Activity Bonds are tax-exempt bonds 

that are issued by the state or local government 

on behalf of a private entity. Their purpose is 

to facilitate private investment for projects 

that generate public benefit. PABs allow for 

the private sector to borrow at tax-exempt 

rates resulting in lower overall financing costs. 

Currently any PABs issued for high-speed 

trains would be subject to a volume cap of the 

respective state; however, a new category of 

exempt facilities was created under SAFETEA-LU 

that allows projects receiving Title 23, and under 

certain conditions Title 49 funds, to qualify for 

the $15 billion in transportation PABs31. The 

Secretary of Transportation and the US DOT 

are responsible for the allocation of these PABs. 

PABs are highly attractive to private investors in 

conjunction with a public-private partnership 

(P3) program that includes equity investment, 

design-build, and operations involvement and 

could be used in conjunction with TIFIA/RRIF. 

For instance PABs were recently used in the 

financing of the $1.9 billion Capital Beltway 

project in Northern Virginia, one of the first 

variable toll rate congestion pricing projects 

in the U.S.

Some of the Authority’s Financial Plan 

scenarios for the P3 funding portion includes 

the use of PABs as senior debt coupled with a 

subordinated TIFIA structure. 

Changes Needed to Existing 

Programs and New Legislation

New funding sources, specifically for highspeed rail, along with the expansion of existing 

transit programs, will need to be created in 

order to provide adequate support for the 

high-speed train. Project proponents argue 

that a focus on investing in America’s overall 

transportation system, as opposed to individual 

modal investments, would encourage more 

efficient allocation of transportation dollars 

and likely increase the proportion of funding 

provided for rail projects. As mentioned above, 

short term funding for high-speed trains is 

31 Specifically, the new category includes: 1) any surface transportation project receiving Title 23 funds, 2) a project for an international bridge or tunnel for which an international entity authorized under federal or state law is responsible and which receives Title 23 funds: and 3) facilities for the transfer of freight from truck to rail or rail to truck 

which receives federal assistance under Title 23 or Title 49. Title 23 and 49 are U.S. Code governing federal funding for highways and transportation.
98

anticipated through the annual transportation 

appropriations process as a new transportation 

authorization has yet to come to the floor. The 

surface transportation reauthorization provides 

the opportunity for the Authority and other 

states developing high-speed rail to seek a 

long-term dedicated funding source. In fact, 

the Authority has already begun to advocate 

for dedicated federal funding for high-speed 

trains, working with members of California’s 

congressional delegation.

Expansion of existing federal funding programs, 

as well as significant new initiatives, will be 

required to support California’s high-speed train 

at the levels assumed in this financing plan. 

Modification of existing federal financing terms 

and restrictions also would make the project 

more attractive to private investors, thereby 

facilitating achievement of the targeted private 

sector funding levels, as well. 

Transportation Reauthorization: 

Re-Authorization of Safe Accountable, Flexible 

and Efficient Transportation Act: A Legacy for 

Users (SAFETEA-LU)

SAFETEA-LU addresses many of the challenges 

that face today’s transportation system, 

including improving safety, reducing traffic 

congestion, improving efficiency in freight 

movement, increasing inter-modal connectivity, 

and protecting the environment, as well 

as laying the groundwork for addressing 

future challenges. It promotes more efficient 

and effective federal surface transportation 

programs by focusing on transportation issues 

of national significance, while giving state and 

local transportation decision makers more 

flexibility for solving transportation problems in 

their communities. 

The reauthorization of this legislation sets 

key transportation funding priorities. The 

current SAFETEA-LU expired on September 

2009. Reauthorization, however, is expected 

to take place over the next18 months. This 

reauthorization process is seen as a vehicle 

for modifications to existing programs that 

could support high-speed trains. Specific 

modifications that would benefit high-speed 

trains include: 

•	 Create a dedicated funding mechanism 

similar to the highway trust fund,

•	 Extend terms for TIFIA and RRIF debt to 

more closely match the useful lives of 

the infrastructure, 

•	 Reduce or modify the RRIF credit risk 

premium,

•	 Create a new-mode contingent 

liability program to mitigate greenfield 

ridership risks, 

•	 Explicitly enable high-speed projects 

to use the $15 billion in PABs 

authorized under SAFETEA-LU for 

transportation projects.

Chairman Oberstar’s proposal for transportation 

reauthorization attempts to address the funding 

challenge high-speed rail faces on the federal 

front and includes a proposed authorization of 

$50 billion. 

New Legislation

While legislation introduced to date addresses 

many of the needs for high-speed trains, 

a key financing mechanism that will help 

support private sector investment will be in 

the creation of a type of contingent liability 

program that allows a potential private sector 

operator to share some of the start-up risks 

associated with ridership. In Europe and 

Asia, rail entities have developed extensive 

experience with intercity and high-speed rail 

ridership demand forecasting. However, the 

United States does not have an established rail 

culture nor experience with such forecasts. As 

such, the level of assurance a private investor, 

credit rating agencies and bond markets may 

have in ridership projections may make P3 

financing a challenge. The Authority is currently 

investigating ridership risk sharing structures 

used in greenfield transportation infrastructure 

projects as well as considering proceeding with 

an “investment grade” ridership forecast.
99

Local Support

Introduction

Local support will provide an important funding 

source for high-speed rail development. 

Targeted local support for the project can be 

divided into two main parts: 1) cost sharing 

or local government support, and 2) private 

participation in station or area development. 

The Authority’s Financing Plan for the Anaheim 

to San Francisco system targets $4-$5 billion 

in local financial support. Local support 

is estimated to be between $2-$3 billion 

and is based on population and possible 

contribution levels from communities across 

the state. In addition, the Authority is targeting 

opportunities such as naming rights and P3 

development around stations totaling another 

$1-$2 billion. As such, the Authority is estimated 

between $4-$5 billion in local support for the 

project. 

The Authority plans to develop plans to solicit 

and develop a process for formalizing local 

support over the next several months. 

Cost Sharing with Local Agencies 

and Governments

The Authority has been engaged in preliminary 

discussions with transportation authorities 

in several areas of the state and identified 

a number of projects where costs might 

be shared between the Authority and local 

agencies. To date, the Authority has focused on 

those projects that would benefit commuter 

rail service in addition to high-speed rail. The 

San Francisco to San Jose and Los Angeles to 

Anaheim corridors are two examples where 

the Authority believes significant cost sharing 

opportunities may exist. 

As mentioned above, the Authority has targeted 

approximately $2-$3 billion in local funding 

support from local communities across the 

state. This estimate was calculated using an 

estimate of self-help county contributions to 

transit as a proxy. However, self-help counties 

were merely used as a guide to estimate 

possible contributions that could come in 

numerous forms, including from Transit 

Oriented Development, Benefit Assessment 

Districts (or Community Facilities Districts), Tax 

Increment Financing, general funds, etc. As 

mentioned above, the Authority is currently 

working on plans to develop a methodology to 

work with local governments and agencies to 

provide support for project development. 

During the ARRA funding process, many 

communities along the alignment pledged 

support for the project. However, the Authority 

understands that competing requests for 

limited local and regional transportation funds 

make it difficult for other local communities 

to set funding priorities at this time, especially 

given the locals’ needs to retain contingencies 

for potential cost increases for existing local 

projects. The Authority expects that as the 

project timeline, requirements, and other 

funding are refined, local funding commitments 

will be made. As discussed below, cost sharing 

with local agencies and locally generated 

revenues from transit-oriented development 

will be negotiated over time.

Locally Generated Revenues from 

Transit-oriented Development and 

Community Facilities Districts

One way for local governments to realize 

significant local revenues from real estate 

appreciation along the alignment is through 

Transit-Oriented Development (TOD). TOD 

would allow local governments to benefit 

from the development of high-speed trains 

with increased real estate tax revenues from 

increased density without burdening the 

balance sheets of local governments. The 

Financial Plan presumes that the Authority 

would work closely with each local agency to 

explore and adopt TOD agreements. As past 

experience has shown, TODs must be carefully 

crafted to local conditions and revenue benefits 

are often realized after the project is completed. 

In addition to TOD, the implementation of 

publicly established benefit assessment 

districts and the Mello Roos districts near 
100

a transit or rail facility are alternative ways 

to raise development-related revenues that 

can be financed. However, the formation of 

benefit assessment districts and Mello Roos 

districts require local approval, and cannot 

be implemented by the Authority directly. 

In addition, a benefit assessment district or 

Mello Roos district must be a relatively large 

geographic area in order to provide a significant 

contribution to the project’s capital costs 

from any given local bond issue or program. 

Furthermore, as these types of financing 

vehicles are real estate development driven, 

ratings agencies and investors may view them 

as speculative, thereby limiting the amount of 

up-front bond funding that can be generated 

for early-stage development of high-speed rail. 

Regardless of the challenges associated with 

assessment districts, successful transportation 

projects have been implemented using benefit 

assessment districts either immediately 

surrounding a transit station or along an entire 

alignment as was seen in the Dulles Metrorail 

extension in Virginia. 

Commercial Concessions at 

CHSR Stations 

Commercial concessions at stations are 

important tools to realize additional locally 

generated revenues. These concessions include 

retail stores, advertising, parking, and other 

commercial revenues. The Financial Plan 

presumes that the Authority would work closely 

with appropriate local agencies to explore and 

adopt station commercial concessions before 

stations are built. These types of revenues 

and related agreements may be viewed by 

the market as speculative, thereby limiting 

the amount of upfront funding that can be 

generated for early-stage development of 

high-speed rail.

Cooperative Funding 

Arrangements with Local 

Transportation Authorities

California law allows “self-help” counties to elect 

to dedicate an increase in local sales tax for local 

transportation projects. The current and future 

self-help county sales tax revenue streams can 

be used on a “pay as you go” basis or can be 

pledged as a source of payment for sales tax 

revenue bonds. California’s self-help counties 

have collectively issued billions of dollars of 

sales tax revenue bonds.

At least 20 California counties have passed 

sales tax measures for transportation for 

specific time periods ranging for 10 years to 30 

years. Los Angeles County has a permanent 1 

percent sales tax increment dedicated toward 

transportation projects. In addition, Los Angeles 

County successfully passed an additional 0.50 

percent sales tax (Measure R) for transportation 

on the November 2008 ballot. The self-help 

counties have specific expenditure plans about 

how the sales tax revenues must be spent, 

which must be consistent with the measures 

approved by local voters. 

Each self-help county expenditure plan is 

different and reflects local transportation 

policy and goals. The self-help counties along 

the high-speed rail alignment may have the 

ability to pledge a portion of their sales tax for 

project capital costs. The Authority has begun 

preliminary work to negotiate with the relevant 

local transportation authorities to explore their 

interest in providing financial support in order 

to facilitate or expedite implementation of the 

project in their respective regions. 

The Authority already has worked closely with 

several local transportation authorities on joint 

development challenges. For example, the 

Orange County Transportation Authority (OCTA) 

signed a memorandum of understanding with 

the Authority in 2007 that calls for OCTA to 

contribute $7 million toward development costs 

for High-Speed Rail in Orange County between 

Anaheim and the Los Angeles county line. 
101

Private Funding / Public-Private 

Partnerships

Introduction

One of the ways the Authority would like 

to leverage public funds for this project is 

through pursuing public-private partnerships. 

High-speed rail, unlike most transit services, 

is expected to generate significant operating 

surpluses. These operating surpluses are 

the basis for the Authority’s plans to engage 

private sector support. Private funding through 

public-private partnership arrangements is 

an increasingly accepted method to support 

the development of infrastructure projects. 

Based on this premise, the Authority’s Financial 

Plan is targeting $10 to $12 billion (in year of 

expenditure dollars) from potential private 

sources for the San Francisco-to-Anaheim 

segment. This investment is primarily backed 

by the high-speed rail’s projected future 

operating surpluses as well as some type of 

revenue guarantee and is based on a level of 

risk and capital markets terms that the team 

believes are appropriate for this type of project. 

To gain a better understanding of private 

interest in the project, the Authority issued a 

Request for Expressions of Interest (RFEI) in the 

Spring of 2008. Since that time, the Authority 

has continued to reach out to private industry 

leaders with experience in High Speed Rail and 

other large infrastructure projects. Results of 

the RFEI have shown that private sector interest 

is strong and diverse; however, public support, 

both financial and political, is needed to 

generate private funding commitments.

Background on Private 

Investment in Infrastructure

Historically, major transportation infrastructure 

projects in the United States have been 

funded primarily with federal funds (as much 

as 80 percent), with state funding comprising 

the remaining share. This paradigm is based 

substantially on the construction of the 

interstate highway system in the 1950s. Since 

that time, the increasing cost of public works 

projects has not been matched by the public 

funds available to pay for them. For example, 

federal shares of major infrastructure projects 

have decreased to approximately 30 percent for 

some programs, and states have had to make 

tough decisions to prioritize the expenditure of 

their funds. Increasingly, U.S. project sponsors 

have followed international trends and are 

turning to private funding sources to develop 

certain projects. 

This trend has been intensified by the active 

interest of private investors, partially driven 

by pension funds, in the infrastructure sector. 

These investors have been attracted to longterm assets with stable cash flows. These 

tend to be ‘brownfield’ or developed projects 

with a revenue history. In the United States, 

Local Cooperation: OCTA Example

OCTA is committed to dramatically increasing transit options in Orange County. OCTA already uses Measure 

M sales tax revenues to fund transit projects throughout the county. In November 2006, Orange County residents voted to extend Measure M until 2046. Although OCTA has covenanted to spend some of its Measure 

M sales tax revenues on specified freeway projects, OCTA also has a wide degree of flexibility in spending 

remaining Measure M sales tax revenues on transit projects, including rail. Additionally, OCTA and the City 

of Anaheim have formed a joint powers authority, the Anaheim Regional Transportation Intermodal Center 

(ARTIC) that is pursuing a public-private partnership for development of an intermodal transportation center that can accommodate freeway, bus, Metrolink, Amtrak, and high-speed rail access.
102

toll roads have been the major focus. Some 

key examples of private investment in toll 

roads are the long-term lease of the Chicago 

Skyway and the Comprehensive Development 

Agreement (CDA) toll roads in Texas. However, 

the assets of private equity funds interested in 

infrastructure investment far exceed the value 

of stable, brownfield investments available, 

which has encouraged these firms to invest in 

non-toll road infrastructure. In addition, given 

the large capital expenditures contemplated in 

many infrastructure projects, engineering and 

equipment firms have been willing to invest 

in projects to participate in project-related 

contracts.

The level and timing of private participation is 

dependent on the perceived risks associated 

with private investment. The main risks 

associated with the high-speed train project 

are environmental, regulatory, legislative, 

construction, technological, ridership and 

operational. For a P3 arrangement to be 

successful, these risks need to be shared 

between the public and private sectors. In 

general, costs are lower when a risk is assigned 

to the party with the best ability to manage that 

specific risk. The private sector will expect to 

be compensated for any risks that it assumes. 

Therefore, the more risk that the public sector 

chooses to address, the higher the level of 

upfront private investment that can be attracted 

to a given project. In some cases, for example, 

with environmental and regulatory risks, the 

public sector may need to significantly mitigate 

the risk before the private sector will invest. 

Alternative Delivery Approaches

The Authority is considering a wide variety of project delivery approaches to optimize the allocation of 

risks. These approaches can range from less private participation to more private sector involvement as 

depicted in the figure below. Each approach is associated with a different risk allocation scheme.
103

Some of these project delivery methods are 

defined below:

Design-Bid-Build (DBB): In this traditional 

form of project delivery the design and 

construction of the facility are conducted 

by different entities. As a result, the DBB 

process is divided into two separate phases 

for design and construction.

Design-Build (DB): Unlike DBB, the 

DB approach combines design and 

construction phases into one fixed-fee 

contract. 

Design-Build-Operate-Maintain and 

Build-Operate-Transfer (DBOM and BOT): 

Under a DBOM or BOT, the contractor 

is responsible for the facility’s design, 

construction, operation, and maintenance 

for a defined/agreed period of time. This 

category includes “Availability Payments” 

discussed below. 

Design-Build-Finance-Operate-Maintain 

(DBFOM): The DBFOM is a variation of the 

DBOM approach. The major difference is 

that, in addition to the design, construction, 

operation and maintenance of the project, 

financial risks are transferred to the private 

partner. While the project sponsor retains 

ownership of the facility, the DBFOM 

approach attracts private financing for the 

project that can be repaid with revenues 

generated during the facility’s operation. 

Utilizing long-term public sources of 

revenue to pay down privately financed 

projects allows the public sector to enjoy 

the benefits associated with a leveraged 

project without issuing bonds or otherwise 

incurring debt on its balance sheet. 

Build Own Operate (BOO): Under a BOO, 

the design, construction, operation, and 

maintenance of a facility are the contractor’s 

responsibility. The major difference between 

BOO and other P3s is that with a BOO 

approach, the private partner owns the 

facility and is assigned all operating revenue 

risk and any surplus revenues for the life of 

the facility.

Availability Payments (AP): This 

mechanism accomplishes performancebased compensation in an asset that 

does not necessarily generate sufficient 

revenue to encourage private investment 

and can be used in conjunction with other 

P3 mechanisms where ongoing O&M 

responsibility exists. An AP requires private 

firms to accept risk related to the ongoing 

performance in the project’s design, 

construction, and O&M. Concessionaires 

would receive periodic payments based 

solely on the condition and/or performance 

of the facility. Besides international 

examples, the $1.76 billion Florida I-595 

project and the recent $1.2 billion Port of 

Miami Tunnel are two notable projects 

procured as APs and have generated 

intense interest among project sponsors 

both because it works with projects with 

weak revenue streams and because more 

controversial toll- or fare-setting and 

return on equity issues do not need to be 

considered.

Public-Private Partnership 

Funding

The Authority’s Financing Plan for the San 

Francisco-to-Anaheim system targets $10.0 to 

$12.0 billion in private sector participation. This 

projection is based on estimated construction 

and operating costs, independent ridership 

and revenue projections, and other available 

funding sources. This Financing Plan assumes 

normalized long-run market conditions. There 

are several different methods through which 

such investment could be obtained.

The targeted $10.0-$12.0 billion level of private 

sector investment is based largely on the 

amount of project-based debt ($7.5-$8.5 billion) 

the Authority believes could be supported 

based on future revenues. These estimated 

revenues were based on independent ridership 

forecasts available in November of 2009 and 

capital market conditions at that time. Implicit 

in these assumptions is some form of a revenue 

guarantee that would guarantee to private 

sector participants that a minimum level of 
104

revenues would be received in the event that 

system revenues are significantly lower than 

forecasted. Without some form of revenue 

guarantee from the public sector, it is unlikely 

that private investment will occur at this level 

until demand for California’s high-speed rail is 

proven. While capital markets have tightened 

since the initial projections, changes in certain 

variables, including increased gas prices, 

have resulted in higher projected ridership. 

P3 concessions would also benefit from 

depreciation tax treatment, which could also 

have a substantial impact on the level of private 

investment. 

In addition to considering private investment 

in exchange for future project revenues, there 

are other mechanisms for private participation 

that would support the project. Vendor 

financing is a key mechanism to consider given 

the equipment needs of the project. Such a 

mechanism would reduce the amount of upfront borrowing required and could reduce 

the cost of financing. Depending on the tax 

regulations applicable to the equipment owner, 

additional pricing benefits could accrue to 

the Authority through the vendor’s capture of 

depreciation benefits. This technique would 

reduce construction costs through a small 

subsidy that export credit agencies could 

provide as part of vendor financing. Overall, 

this technique would allow for more substantive 

private participation earlier in the development 

of the system and it would allow the Authority 

to achieve a higher level of risk transfer. 

Design-build contracting and other project 

delivery mechanisms also are vehicles 

that would allow the Authority to transfer 

significant design, construction and technical 

risk to the private sector entities best in the 

position to manage these risks. Although 

this may not generate up-front investment, 

these mechanisms can significantly reduce or 

eliminate the risk associated with increases 

in costs during construction or equipment 

development. Including operations and/or 

maintenance in a design-build contract (i.e., 

design-build-operate-maintain arrangements) 

also would allow for the transfer of operational 

risks associated with the project. If payment 

is based on performance or tied to operating 

revenues, such contracts provide considerable 

incentive for the private sector to run the facility 

as efficiently as possible. Private sector firms 

tend to be most willing to 

accept risk in those areas 

where they hold the most 

experience, leading such 

arrangements to require a 

multiparty private sector 

consortium, in most cases.

RFEI Process and Results

In March 2008, the Authority issued a Request 

for Expressions of Interest (RFEI). The intent of 

the RFEI was to gain a better understanding 

of how the Project could benefit from private 

sector participation and to gauge the level of 

private interest in the Project. The Authority 

received written responses from 30 private 

firms, including construction firms, system and 

equipment providers, financial institutions, and 

operators. These respondents included major 

firms in each of these categories, providing 

a good sample from which to draw initial 

conclusions about private sector experience and 

preferences for involvement32. Their responses 

supported the Financial Plan’s assumption of 

private sector interest in a P3 arrangement 

for the high-speed train project. In addition, 

the Finance team has conducted ongoing 

interviews with private sector participants to 

address changing market conditions especially 

after the passage of the American Recovery and 

Reinvestment Act and the CA State GO bond 

act. 

32 For a more in-depth discussion of RFEI results, please see the 2008 RFEI Report. 

http://www.cahighspeedrail.ca.gov/images/chsr/20081118152745_Source%20document%209%20rfei.pdf
105

Respondents to the RFEI and subsequent 

telephone surveys were interested in 

participating through a variety of mechanisms, 

many of which would require integration of 

project components outside of their individual 

area(s) of expertise. Many respondents 

expressed concern about integration among 

the various project components and indicated 

that a design-build-finance-operate-maintain 

(DBFOM) or a design-build-operate-maintain 

(DBOM) approach could resolve these issues. 

Given the size of the Project, multiple project 

delivery mechanisms likely will be necessary, 

particularly for civil works contracts. 

Respondents also discussed factors that would 

influence the level of private investment and 

participation. This discussion indicated that 

private parties are interested in investing 

in the project; however, the overall level 

of private investment and participation is 

highly dependent on the amount of risk to 

be transferred to the private sector entity. 

The most important factor was the level of 

commitment from public funding sources. 

Without strong state and federal support, 

many participants indicated they would not 

participate. Another critical factor was the need 

for a public policy mandate for the Project 

and clear P3 legal authorization. Many policy, 

legislative and state funding challenges have 

been addressed with the passage of the Bond 

Act in November 2008. In addition to the 

mitigation of these risks, respondents indicated 

that all environmental risk and right-of-way 

acquisition must be handled by the public 

sector. 

Once the above factors have been addressed, 

the specific risks associated with individual 

contracts will become critical. There are a variety 

of issues with contracts, including, among 

others, performance guarantees and the timing 

and source of repayment. Specific concerns 

centered on the extent to which private 

investment is to be repaid through ridership 

revenues. Respondents perceive a high level 

of risk in such repayment due to the unique 

nature of the project and the lack of comparable 

modes of transport in the United States. While 

respondents indicated that some ridership risk 

is acceptable, due to a private party’s expected 

role in increasing revenues, there is limited 

appetite for investment that would be repaid 

largely through ridership revenues without 

any type of revenue guarantee or availability 

payments from the project sponsor at this time. 

Investors’ willingness to take on greater amount 

of ridership risk will increase as initial segments 

are completed and ridership meets or exceeds 

those projections.

Since the RFEI in 2008, the Authority has 

continued to reach out to the private sector 

to gauge interest in the Project as well as seek 

guidance on technical and procurement issues. 

In total, over 40 firms have expressed their 

interest in participating in the Project in their 

given area of expertise or as part of a bidding 

consortium. The Authority has also obtained 

memoranda of understanding from Chinese, 

French, German, Spanish, Japanese and Italian 

train manufacturers to encourage international 

cooperation. As the Project moves into 2010, 

the Authority is once again planning to consult 

the private sector as it moves forward with 

the beginnings of a procurement process. The 

Authority plans to give interested private firms 

the ability to comment on its planned Request 

for Qualifications (RFQ) process, before moving 

ahead with the formal RFQ. The Authority has 

begun to take this feedback and interest into 

account as it develops the Project in order to 

maximize private participation in the funding 

and construction of the system.

The Authority recognizes that there are a 

number of issues that remain to be resolved 

before the exact role and extent of private 

sector participation can be determined. 

However, such challenges are to be expected 

with a Project of this size, complexity, risk 

profile, and duration of development. For 

example, there will be risk and reward tradeoffs, and various phasing and funding timing 

requirements, to consider before contracts 

for any given portion of the Project are 

undertaken. It is important to note, though, 

that the unknowns concerning private sector 

participation present an opportunity for 

the project, as the Authority can encourage 

competition within the private sector and 
106

design P3 scenarios that are favorable to the project. As further information about specific Project 

sections is developed, the Authority will focus on designing P3 contract opportunities that achieve its 

goals and are attractive investments for the private sector.

Timing and Phasing of Funds

Introduction 

The Financial Plan Team, in conjunction with the Authority’s engineering consultants, has 

developed estimates for sources and uses of funds for the San Francisco-to-Anaheim Project 

totaling approximately $42.6 billion (in year 

of expenditure dollars). The Authority expects 

to fund the $42.6 billion in total cost through 

targets of $17-$19 billion in federal grants, 

$9 billion in state funds, $10.0- $12.0 billion 

from public-private partnerships, and $4.0- $ 

5.0 billion in local funding assistance and cost 

sharing. 

Timing and Staging of Investment 

for the Anaheim to San Francisco 

High-Speed Train System

The Authority’s Financial Plan expects initial 

environmental studies and right-of-way 

acquisition for the project to be funded with 

public dollars from federal, state, and local 

sources. Initial contracts, including those funded 

through the ARRA stimulus package, would also 

be paid for largely with public dollars, although 

the Authority will leverage opportunities for 

private participation early in the Project through 

design-build contracts and other mechanisms. 

Although it may be feasible to achieve a partial 

ridership risk transfer early in the Project, it is 

probable that a firm or consortia accepting 

substantial compensation based on future 

operating surpluses will invest in the middle 

to later term of Project’s construction period. 

This investment is based on ridership and will 

likely require some form of minimum revenue 

guarantee for private participants until demand 

for high-speed rail is proven in the United States 

and California. After several years of proven 

ridership, private participants are likely to accept 

a greater percentage of compensation subject 

to ridership risk.

Billions of Dollars (year of expenditure)
107

Several respondents to the Authority’s Request 

for Expressions of Interest indicated that 

although they were willing to accept some 

payment based on future operating revenues, 

they would be more likely to do so later in the 

Project’s development. As a result, it will be 

important to secure the federal government as 

a partner early in the development process to 

provide funds to be coupled with state and local 

monies and fund early construction.

California High Speed Rail 

Authority Business Plan: 

Discussion of Financial Model 

Used to Estimate Project Funding 

Sources

Overview

The current California High-Speed Rail Project 

financial model includes scenarios for a 50-year, 

75-year and 99-year concession beginning 

in 2010 and demonstrates the feasibility of 

the Project as a long-term public-private 

partnership. The model is developed as a 

public-private partnership or a concession 

and it assumes that the concession could take 

the form of a design-build-finance-operateand-maintain (DBFON). The first part of the 

model focuses on the construction costs. As 

discussed above, the P3 portion of Project 

funded is estimated to be between $10-12 

billion. The $10-12 billion will be made up of 

senior debt financing, a subordinate TIFIA loan, 

and a private equity contribution. The private 

funding capacity is sized based on the projected 

cash flows and assumptions regarding cost 

and structure of financing, associated with 

the timing of future cash flows and the risks 

associated with the project. It is assumed that 

remaining project funding will come from 

federal, state, and local grants. 

Capital Expenditures

Total upfront capital expenditures include costs 

for construction, systems and electrification, 

program implementation costs, and vehicle 

costs as shown below:

As outlined in the previous sections, the 

construction costs are provided by section for 

the following seven sections:

•	 San Francisco to San Jose

•	 San Jose to Merced

•	 Merced to Fresno

•	 Fresno to Bakersfield

•	 Bakersfield to Palmdale

•	 Palmdale to Los Angeles

•	 Los Angeles to Anaheim

The construction costs are incurred over 

the years 2011 to 2018; vehicle costs are 

incurred over the years 2011 to 2035; systems 

and electrification costs are incurred from 

2013 through 2019; and finally, program 

implementation costs are incurred over the 

years 2010 through 2020.

In addition to upfront capital expenditures, 

provisions are made for ongoing renewal and 

replacement costs.

Operations

Operating revenues are earned beginning in 

year 2020, and operations and maintenance 

expenses are incurred beginning in year 2017 

as preliminary testing and minimal operations 

may begin in 2017. The assumptions used for 

net operating cash flows are described in detail 
108

in the ridership and revenue section of this 

Business Plan and are summarized below:

Based on the operating plan and the 

ridership and revenue figures presented in 

previous sections, the operating revenues are 

summarized in the chart above. Operations and 

maintenance expense assumptions are also laid 

out in the previous chapter and summarized 

in the chart above. In the first year the net 

operating surplus is approximately $370 million 

and increases to almost $3.9 billion in 2035. 

These represent significant operating surpluses. 

The above assumptions are based on fares 

being set to 83 percent of average airfares for 

comparable routes33.

Funding and Financing

The breakdown of total funding sources of upfront capital costs is shown below:

Private Sources

The model assumes that the private sources 

of funding include senior debt in the form of 

Private Activity Bonds (PABs), a subordinate 

TIFIA loan, and private equity. In order to 

maximize borrowing amounts, minimum 

required debt service coverage ratios are 

assumed to be 1.40 for senior debt service, 

and 1.10 for aggregate debt service. However, 

it is also assumed that lenders will require 

a minimum equity contribution of 20 to 

25 percent of the private funding amount. 

Therefore, since this requirement is the 

constraining factor for debt issuance, the 

actual minimum debt service coverage ratios 

are in fact higher than the required minimum 

ratios (2.22 for senior debt service, and 1.44 for 

aggregate debt service). It is assumed that the 

TIFIA issuance amount cannot exceed the senior 

debt amount; therefore, these two issuance 

amounts are equal. Additionally, the TIFIA loan 

amount is considerably less than 33 percent of 

total project costs. Finally, in order to calculate 

the total private funding capacity, an after-tax 

equity internal rate of return (IRR) or investment 

hurdle rate of 16 percent has been assumed. 

Based on this model, a sample breakdown of 

privately funded sources of up-front capital 

costs is shown below:

State, Local, and Federal Grants

It is assumed that the balance of the funding 

requirement will be met by government grants. 

Since the state has already authorized up to $9 

billion, it is assumed that the state’s contribution 

will remain constant at this amount. It is also 

assumed that local sources will fund $4-$5 

billion of the up-front capital costs. Finally, it is 

assumed that the remaining need of $17-$19 

billion will be met by grants from the federal 

government.

33 Refer to Table B within the Ridership, Revenue & Operations Chapter
D E C E M B E R 2 0 0 9

109

Economy / Climate Right Now

In the face of unprecedented 

worldwide interest in high-speed 

trains, President Obama’s financial 

and political commitment to create 

a system in the United States, and 

California voters’ approval of a $9 

billion state bond fund for such a 

project, have positioned California 

to be at the leading edge of public 

and private investment in highspeed rail. 

California’s system will help 

meet the state’s historic demand 

for mobility. But what’s more, it will 

create jobs, stimulate the economy, 

and provide new opportunity for 

private investment at a time when 

our state needs it most. 

Despite a worldwide economic 

downturn over the past two 

years, American and international 

companies and consortiums 

have strongly voiced interest in 

investment in California’s system. 

Early in 2010, the Authority plans to 

step up efforts to identify potential 

public-private partners (P3). 

Demand for New Transportation 

Alternatives

California’s culture and economy are built on mobility. When 

voters approved Proposition 1A in 2008, they demonstrated 

their support for a new 21st century option that would ensure 

they maintain that mobility. 

Over the next two decades, California’s high-speed train will 

alleviate the need to spend more than $100 billion to build: 

•	 3,000 miles of new freeway 

•	 Five airport runways 

•	 90 departure gates

Economic and Social Impact of a HighSpeed Train

In tough financial times, a project of this magnitude will have 

a significant impact, even in the short term. Construction 

start-up of ARRA-funding-related sections by 2012 is expected 

to generate 130,000 early jobs and kick-start economic 

ARRA and Other Federal Funding

President Obama has launched a national high-speed train initiative 

with $8 billion in new stimulus funding under the American 

Resource and Recovery Act and another $1 billion a year for 

high-speed trains over the next five years in the federal budget. 

California is the best-prepared state to receive and maximize the 

benefit of ARRA funds for high-speed train development and 

is expected to be a leading candidate for a significant share of 

stimulus funding. It’s the only high-speed train project that can 

meet three major tests in qualifying for those funds: 

•	 Billions of dollars in voter-approved state funding 

committed to the project

•	 Significant environmental clearances completed or 

underway

•	 Construction projects that can break ground by 2012 

Congress also has indicated its interest in financing development 

of high-speed train systems in America and key congressional 

leaders have said they want to expand on the president’s call for 

investment of an additional $1 billion a year over the next five years. 
110

activity in design, construction and supply 

services. Over the longer term, California’s highspeed train will mean:

•	 Nearly 600,000 construction-related jobs 

•	 450,000 permanent jobs 

•	 Improved movement of people, goods 

and services

•	 Faster travel times for many 

•	 Congestion relief for freeways and airports 

•	 Improved air quality and related-health 

care costs

•	 More energy efficiency – only 1/3rd the 

energy of airplanes, 1/5th the energy of 

passenger cars 

•	 Reduced dependence on foreign oil by 

12.7 million barrels a year

•	 12 billion fewer pounds a year in 

greenhouse gases

•	 Revitalization of many of the communities 

around new transportation terminals

Job Creation

California’s unemployment rate stands today 

at a historically high level, especially in certain 

regions of our state such as the Central Valley. 

Infrastructure projects have been proven as 

job creators that have the ability to help to pull 

economies out of recessionary times. 

California labor leaders support the high-speed 

train project and have begun to do so vocally 

because they understand the job creation that 

would come along with such an infrastructure 

project. President Obama has focused on the 

available ARRA funding for high-speed intercity 

rail as a significant job creator.

In California, the initial system is projected to 

create the equivalent of 600,000 full-time, oneyear jobs over the course of its construction. 

While the calculation is a bit more complex, 

a simplified and conservative version puts 

the creation of both direct and indirectly 

related jobs for an infrastructure project of 

this sort at 20,000 total generated per $1 

billion of construction. So, roughly, that means 

the California high-speed train project’s job 

creation, broken down by region of the project, 

would be: 

•	 San Francisco – San Jose: 105,000

•	 San Jose – Merced: 112,000

•	 Merced – Bakersfield: 135,000

•	 Bakersfield – Palmdale: 81,000

•	 Palmdale – Los Angeles: 125,000

•	 Los Angeles – Anaheim: 92,000

Current Interest In High-Speed 

Rail in General and California’s 

Plan in Particular

Interest in investing in high-speed trains 

appears to be at unprecedented levels both 

in America and around the world. Numerous 

countries, including Russia, Poland and Brazil 

are investing in establishing high-speed train 

lines, while others are adding to their existing 

systems. Private companies and foreign 

governments are gearing up to invest in doing 

so here. This is due in part to President Obama’s 

commitment to high-speed rail development in 

the United States. In California, it is also due in 

large part to the voters’ approval of $9 billion in 

state bond funds for the project. Other factors 

raising interest in high-speed rail investment are 

the job creation of such an infrastructure project 

and the view that infrastructure investment and 

public-private partnerships are more sound 

investments in the current economy than the 

financial markets. 

While the Authority’s previous work formally 

gauging private-sector interest was conducted 

largely before the passage of Proposition 1A and 

the president’s stimulus plan announcement, 

continued interest from and contact with 

private entities and foreign consortiums tell us 

that this interest has increased. The Authority 

plans to, in the early months of 2010, prepare 

a process by which interested private entities 

can express their interest in participating in the 

California high-speed rail project, lay out their 

qualifications for doing so and their envisioned 

role. 
111

Private Sector Interest

Over the past two years, the Authority has 

undertaken extensive work to gauge and 

encourage private sector interest in the HighSpeed Rail project. In March 2008, the Authority 

issued a Request for Expressions of Interest 

(“RFEI”). The purpose of the RFEI was to gain a 

better understanding of how the Project could 

benefit from private sector participation and 

to gauge the level of private interest in the 

Project. Responses were received from 30 private 

firms, including construction firms, system and 

equipment providers, financial institutions, 

and train system operators. Respondents 

included major firms in each of these categories, 

providing a good sample from which to 

draw initial conclusions about private sector 

experience and preferences for involvement34. 

Some interested respondents to the RFEI 

expressed concern that participation would 

require integration of project components 

outside of their individual area(s) of expertise. 

But many indicated that a design-build-financeoperate-maintain (“DBFOM”) or a design-buildoperate-maintain (“DBOM”) approach could 

resolve these issues. Given the size of the Project, 

multiple project delivery mechanisms likely 

will be necessary, particularly for civil works 

contracts. 

While the majority indicated that they would 

make a financial investment in a project like 

California’s high-speed train, respondents 

pointed out that the type and amount of their 

participation would depend on the level of 

risk associated with such an investment. Clear 

public funding commitments, well-defined 

projects, and proper allocation of project risks 

ranging from construction and environmental 

to technical and future ridership were cited as 

vital to a private firm’s decision to invest in the 

project. The Authority has begun to take steps to 

encourage private investment, but these topics 

will be further developed as the project moves 

forward.

Since the RFEI in 2008, the Authority has 

continued to reach out to the private sector 

to gauge interest in the project as well as 

seek guidance on technical and procurement 

issues. In total, over 40 firms have expressed 

their interest in participating in the project 

in their given area of expertise or as part of a 

bidding consortium. The Authority has also 

obtained memoranda of understanding from 

French, German, Japanese, and Italian train 

manufacturers to encourage international 

cooperation. The Authority is once again 

planning to consult the private sector as 

it moves forward with the beginnings of a 

procurement process in 2010. The Authority 

plans to give interested private firms the ability 

to comment on its planned RFQ process before 

moving ahead with any formal RFQs. The 

Authority has begun to take this feedback and 

interest into account as it develops the project 

in order to maximize private participation in the 

funding and construction of the system. 

The Authority recognizes that there are a 

number of issues, including the level of risk 

facing investors, that remain to be addressed 

before the exact role and extent of private 

sector participation can be determined. 

Nevertheless, private investment interest is 

expected to be strong and key to long-term 

success of California’s system. A variety of 

challenges are to be expected with a project of 

this size, complexity, risk profile, and duration 

of development. For example, there will be risk 

and reward trade-offs, and various phasing and 

funding timing requirements to consider before 

contracts for any given portion of the project 

are undertaken. As further information about 

specific project segments is developed, the 

Authority will focus on designing P3 contract 

opportunities that achieve its goals and are 

attractive investments for the private sector.

34 For a more in-depth discussion of RFEI results, please see the 2008 RFEI Report. 
D E C E M B E R 2 0 0 9

112

Subsequent Sections

In addition to the Initial 

system described in depth in 

this document, the High-Speed 

Rail Authority is planning and 

conducting environmental reviews 

on additional sections that would 

result in a total system about 800 

miles in length linking Sacramento, 

the San Francisco Bay Area, the 

Central Valley, Los Angeles, Orange 

County, the Inland Empire, and San 

Diego. Additionally, the Authority 

is working on a separate “Altamont 

Corridor Rail Project” which 

complements the high-speed train 

system. The Altamont Corridor Rail 

Project is being done in partnership 

with the San Joaquin Regional Rail 

Commission (SJRRC) and other local 

and regional agencies to improve 

passenger train service over the 

Altamont Pass. 

Proposition 1A provides that 

the Los Angeles to San Diego via 

the Inland Empire and the Merced 

to Sacramento sections, as well 

as the Altamont Corridor Rail 

Project, can also compete for and 

use the bond for capital costs with 

available funding as long as there is 

no adverse impact on the Phase 1 

priority section. 

This section gives an update on 

the progress of the Los Angeles to 

San Diego via the Inland Empire, 

Merced to Sacramento sections, 

and the Altamont Corridor Rail 

Project. Each are currently in the 

very early stages of project-level 

environmental review, however 

significant progress has been made 

to move each of these corridors 

forward toward implementation.

Since 2008, the Authority has collaborated with the Southern 

California High-Speed Rail Inland Corridor Group (SoCal ICG), 

which was formed by a Memorandum of Understanding (MOU) 

signed by the Authority and Southern California Association 

of Governments, Los Angeles Metro, San Diego Association of 

Governments, San Bernardino Associated Governments, the 

Riverside County Transportation Commission, and the San 

Diego County Regional Airport Authority. One of the purposes 

of the SoCal ICG is to demonstrate partnership with regional 

entities and to assist the Authority with the review of the 

Program EIR/EIS alternative alignments and station locations 

and in identifying additional alternative project alignments and 

optional station locations to be studied in the Los Angeles to 

San Diego via the Inland Empire Project EIR/EIS. The Authority 

has consulted with the SoCal ICG on a monthly basis since the 

summer of 2008.

To support the development of the Los Angeles to San Diego 

via the Inland Empire section of the high-speed train system, 

the SoCal ICG partner agencies formed four Technical Working 

Groups (TWGs) in Los Angeles, Riverside, San Bernardino, 

and San Diego Counties. The TWGs met with the Authority 

in November, 2008, February, 2009; and July/August, 2009 to 

identify additional alternative alignments and optional station 

locations to be further considered in the Project EIR/EIS along 

with the alignment alternatives and station locations selected 

with the 2005 Program EIR/EIS. In addition, alternative sites for 

right-of-way maintenance, train storage facilities and a train 

service and inspection facility will be evaluated in the LA-SD 

Section via the Inland Empire of the project area. 

The Los Angeles to San Diego via the Inland Empire Section 

would extend from Los Angeles through the San Gabriel Valley, 

to Ontario Airport and the Inland Empire, and terminating in San 

Diego. The alignment corridor alternatives include the following 

as listed in the three sub-sections below:

Los Angeles to Ontario Sub-Section

•	 UPRR

•	 UPRR Adjacent

•	 State Route 60

•	 Interstate 10

•	 Holt Boulevard

•	 Metro/Metrolink

Los Angeles to San Diego via the Inland Empire
113

Ontario to Murrieta Sub-Section

•	 UPRR

•	 BNSF

•	 SANBAG/Metrolink

•	 Milliken Avenue/Interstate 15

•	 Interstate 215

Murrieta to San Diego Sub-Section

•	 Interstate 15

•	 Carroll Canyon Road

•	 Miramar Road

•	 LOSSAN / Interstate 5

The candidate station stops in the 

Los Angeles to San Diego via the 

Inland Empire Section have been 

identified include the following:

•	 San Gabriel Valley (El 

Monte, West Covina, 

City of Industry, Cal Poly 

Pomona, Pomona)

•	 Ontario Airport

•	 San Bernardino

•	 Riverside

•	 March Air Reserve Base

•	 Corona

•	 Murrieta

•	 Escondido 

•	 University City

•	 San Diego (Downtown, 

Lindbergh Field)
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Current Process

The Los Angeles to San Diego via the Inland 

Empire section completed the public 

scoping comment period in November 

2009. The team is currently evaluating 

scoping comments that include additional 

alternative alignments in Los Angeles and 

San Diego counties. These alignment 

alternatives include Interstate 10 west of 

Interstate 605 to Los Angeles Union Station 

and an alternative Interstate 15 alignment 

from Mira Mesa to Lindbergh Field. 

Alternatives will be refined as the project 

continues.

Currently, the team is developing a 

draft scoping report and initiating the 

alternatives analysis (AA) process, to be 

completed by the end of 2010. During 

the AA process, SoCal ICG and TWGs will 

continue in each of the four counties 

to review and provide input into the 

development of the alignment and station 

alternatives. This process also includes 

coordination with Caltrans (District 11, 

8, and 7), Resource Agencies, 100+ cities 

within the Section, and local agencies and 

stakeholders. Each partner represented by 

the SoCal ICG also participates in a Public 

Relations and Policy coordination effort and 

meets on a regular basis.

Timeline

It is anticipated that the environmental 

review could be completed for the Los 

Angeles to San Diego via the Inland Empire 

section by end of 2013, with construction 

dates to be established based upon 

available funding. 

Merced to Sacramento

Description

The Merced to Sacramento section would 

extend north from Merced – where the 

train system backbone (Phase 1) turns west 

to reach the Bay Area – and connect to 

the capital city generally following a UPRR 

or BNSF / short line railroad alignment 

terminating at the existing Amtrak and 

light rail intermodal terminal at the historic 

Southern Pacific railyard site in downtown 

Sacramento.

Four candidate stops have been 

identified: Merced, Modesto, Stockton and 

Sacramento. The environmental process 

which is underway for the Fresno – Merced 

section has narrowed down the station 

location in Merced to a preferred site 

along the UPRR. There are two alternative 

station options for Modesto, a downtown 

site along the UPRR and a suburban site 

currently served by Amtrak along the BNSF. 

A downtown location near the existing 

ACE station along the former Southern 

Pacific (now UPRR) is preferred and the local 

preference in Sacramento is for the existing 

historic depot in downtown in that city as 

well.

In addition to supporting operation 

of statewide HST trains, this segment 

could support regional intercity services 

which would include additional stops 

of significance within the region. Also, 

these regional services could be provided 

both north-south along the Central Valley 

main spine of the HST system as well as 

connecting services via the Altamont 

Pass route which, is being developed 

as a complementary regional route in 

conjunction with the statewide HST system.

The Authority has signed Memoranda of 

Understanding (MOU) with both the City of 

Sacramento as well as the SJRRC, which is 

owner and manager of the ACE intercity and 

commuter rail service.
115

The City of Sacramento has expressed 

strong sentiment to support developing the 

entire length of the corridor and bringing 

the line all the way to downtown where it 

would meet the Regional Transit LRT system 

(including an airport connection presently 

under development), Amtrak long-haul 

passenger trains, and the Capitol Corridor 

intercity rail service which would serve as a 

feeder to the HST system. 

SJRRC has a vision to operate regional 

intercity services along the segment that 

would serve the four HST stops as well as 

additional regional stops located between 

the HST stops, which could be supported 

with additional investment, such as 

providing four track stations with station 

tracks to avoid delays to the HST services 

along the main line. Accordingly, SJRRC has 

signed a MOU with the Authority to jointly 

plan the infrastructure and is assembling 

sources of local funds to augment the 

planning, design and construction effort 

being undertaken by the Authority.

Work to date has been accomplished in 

this corridor to answer resource agency 

questions regarding water quality impacts 

along the UPRR north of Stockton as well 

as preliminary layouts for the Sacramento 

terminal to provide input into the City of 

Sacramento ongoing process of refining the 

master plan for the intermodal station area. 
116

Current Process

The Federal Railroad Administration has 

agreed to allow the formal environmental 

process commence in early 2010 with 

issuance of a Notice of Intent / Notice 

of Preparation (NOI/NOP) and scoping 

meetings to engage the public, staffs 

and policy makers in the corridor. In 

anticipation of the issuance of the NOI/NOP 

the Authority has initiated a comprehensive 

effort, including agency coordination as 

well as public outreach, to engage the 

participants in the environmental clearance 

process.

It is anticipated that funding for the 

balance of FY09/10 will allow the project 

to follow up on the scoping meetings with 

development of an alternatives analysis, 

which will identify the most promising 

alignments and station locations to be 

evaluated in the EIR/EIS.

Timeline

It is anticipated that environmental 

review could be completed for the 

Merced to Sacramento section by 2014 

with construction dates to be established 

based upon funding availability. Although 

this is a “Phase 2” section, the funding 

outlook includes the potential for future 

federal funding for both intercity as well 

as commuter rail, and local transportation 

funding such as may be assembled by 

SJRRC working in conjunction with the 

Authority and potential state level funding.

Altamont Corridor Rail Project

Description

The Altamont Corridor Rail Project will 

develop a new regional rail passenger 

corridor supporting intercity and commuter 

services that will upgrade the existing ACE 

service owned and managed by the SJRRC 

in the near term as well as be compatible 

with the statewide HST system in the long 

term. While this project is not part of the 

high-speed train system, this corridor is 

formally recognized as eligible for funding 

through Proposition 1A funds and California 

included the Altamont Corridor Rail Project 

in its request for funding under the highspeed rail provisions of the American 

Revitalization and Reinvestment Act (ARRA) 

“stimulus” initiative.

As a joint-use corridor, the Altamont 

Corridor Rail Project can be improved 

incrementally by providing new, higherspeed passenger tracks for existing ACE 

equipment or “second generation” ACE 

consists capable of higher maximum 

speeds. The corridor has the potential to 

attract significant intercity and commuter 

ridership as it occupies a key topographic 

“gateway” between the Bay Area and 

northern San Joaquin Valley through which 

existing travel is focused. In addition, 

the corridor can serve as a feeder to the 

statewide HST system by connecting to the 

Merced – San Jose – San Francisco section 

of the main line in San Jose as well as to the 

Merced – Stockton – Sacramento phase two 

main line in Stockton and Modesto. 

The Authority has developed the Altamont 

Corridor Partnership which includes more 

than a dozen regional transportation, 

planning and government entity partners 

which through the venue of the Altamont 

Corridor Partnership Working Group have 

developed consensus on the overall route, 

key objectives, planning principles, and 

major project elements including the 

general route location, candidate stations, 

key project features, as well as phasing and 

staging considerations.
117

The Authority has signed Memoranda of 

Understanding (MOU) with three entities 

that engage this corridor, including Caltrain, 

SJRRC and the City of Sacramento, and 

approved the signature of an MOU with 

BART.

Under the venue of the various MOU’s, the 

Authority and its partners are seeking to 

develop a linkage to the BART system to 

extend the coverage beyond the immediate 

corridor route principally in the East Bay, 

linkages with the Caltrain system to serve 

the Peninsula; and most importantly, the 

agreement with SJRRC recognizes the 

interest of that entity to operate regional 

intercity and commuter services along the 

Altamont Corridor, which could extend 

beyond onto the high-speed train mainline 

tracks in the Central Valley such that 

operation of a Sacramento to San Jose train 

via the Altamont route may be possible.

The Authority developed a specific 

description of the initial project description, 

as well as the goals, purpose and benefits, 

which was considered by the FRA and 

which led to the FRA agreeing to serve as 

the lead federal agency (with the Federal 

Transit Administration as a cooperating 

agency) for the NEPA process. In addition, 

SJRRC has agreed to be a responsible 

agency under CEQA in conjunction with the 

environmental process.

The extensive agency coordination that was 

accomplished to develop the consensus 

within the Working Group to advance the 

project was supplemented with a large 

outreach effort that culminated with four 

scoping meetings held along the 80+ mile 

corridor to kick off the formal environmental 

process.
118

Current Process

The Authority is reviewing the input received 

at the scoping meetings and will consider 

this information along with prior information 

developed during preparation of the Bay 

Area to Central Valley Program EIR/EIS to 

delineate and make a preliminary assessment 

of candidate alignments and station 

locations. This will result in the completion of 

a Draft Alternatives Analysis by June of 2010.

Special focus is being given on informing 

the parallel progress being made by BART 

on the BART to Livermore EIS. BART recently 

circulated a Draft EIS/EIR that includes nine 

alternatives for extending to Livermore 

with various opportunities for providing a 

joint intermodal station with ACE and the 

future Altamont HST line. The Authority had 

previously identified numerous candidate 

segments within the Tri Valley area for HST 

through the 2005 Statewide EIS/EIR and 

2008 Bay Area to Central Valley EIS/EIR. 

The focused work will provide input to the 

BART process leading to the narrowing of 

BART alternatives ultimately designating 

a preferred option concurrent with the 

Authority substantially completing its 

alternatives analysis for the same area.

Timeline

It is anticipated that environmental review 

could be completed for the Altamont 

Corridor by 2014 with construction dates 

to be established based upon funding 

availability. Although Altamont Pass is not 

part of the “Phase 1” main line between Los 

Angeles and San Francisco, it is eligible for 

state bond funding, and local partner SJRRC 

is assembling sources of funds to support 

not only the planning and environmental 

process but also right-of-way acquisition and 

construction of near-term beneficial phases 

in conjunction with anticipated future federal 

funding. The actual construction dates will 

depend upon the magnitude of the specific 

improvements and available funds.
D E C E M B E R 2 0 0 9

119

Risks and Mitigation

Risks That Could Jeopardize Project Completion

A project of this size, scope and 

nature faces a number of risks that 

could jeopardize its completion. 

Any frank discussion of the project 

and its planning must include 

these risks, and any credible plan 

for the project must address how 

these risks would be mitigated. This 

section describes those risks in a 

frank manner and notes the manner 

in which the Authority plans to 

mitigate them. General categories 

of risk include funding, politics, 

litigation, federal regulations, 

construction, and unpredictable 

events.

For the purpose of this report to the Legislature, and at this 

current juncture in the development of California’s high-speed 

train project, it is important to ask the question, “What factors 

exist that could derail the project and delay or prevent its 

ultimate completion?” Any infrastructure project faces its share 

of risk, and this project is no different. The California High-Speed 

Rail Authority believes it is aware of the existing risks and is 

taking, or has plans to take if necessary, the appropriate steps 

to prevent and mitigate those threats. Below is a discussion of 

those existing risks and how the Authority would guard against 

them impacting the delivery of a high-speed train system. 

Funding 

The Project will likely be exposed to three major types of 

financial risks, typical of projects of this size and of any financing 

that seeks capital in the U.S. and international markets. The most 

basic risk is that the project does not win the credit approval 

from the financial institutions, including banks, credit rating 

agencies, funds and underwriters, that will provide the capital 

directly or as an intermediary to the project. In addition, the 

project may not receive approval from the investment oversight 

committees of the respective strategic investors (such as 

construction firms, vendors).

The second set of risks are overall market risks. As we have 

experienced in 2008 and 2009, the financial markets may 

essentially “shut down” for all but the highest creditworthy 

financings. This may apply to both bank financings as well as 

capital market transactions. Furthermore, the capital of strategic 

investors may also be constrained as they focus on maintaining 

liquidity.

The third set of risks is that governments are not able to follow 

through on their grant and loan commitments. For instance, 

Congress could delay funding transportation programs, such 

as the TIFIA program, which could imperil part of the financing, 

since this may become a key funding source. Or, as California 

is experiencing now, California’s credit ratings could affect the 

project’s ability to issue GO bonds.

To mitigate these risks, the Authority will consider a number of 

mitigation techniques. For the first risk – credit and approval 

risks – the Authority and its financial team will work closely with 

the financial markets and investors to clearly communicate the 

project and obtain up-to-date feedback. The Authority should 

have a very clear idea whether approval can be obtained and 

what kind of changes need to be made for the markets to accept 

the project.
120

For the second type of risk – overall market risks 

– the Authority has to be continually monitoring 

the market and develop strong “back-up 

strategies.” For one, this means following a dual 

bank/capital markets strategy, so that if one 

market closes, the Authority can access the 

other one. In addition, the Authority may want 

to develop project segmentation strategies that 

allow for the development of certain segments 

even if other segments are delayed due to 

turbulence in the financial markets. In essence, 

this is what the Authority is already considering 

with the proposed ARRA segments that will be 

built to ensure independent utility in case the 

connecting segments are delayed. In a similar 

way, the Authority needs to plan for the third 

set of risks – lack of government follow-through 

– by carefully assessing how each government 

funding source affects the build-out of each 

segment.

Politics

Political support is critical to a project of this 

size, scope, and corresponding funding needs. 

To be successful, the Authority must build 

strong partnerships with state, local, and federal 

legislators.

A valid risk to completion of this project is a lack 

of political support and will to see it through to 

completion. 

However, when speaking of mitigating the risk 

of waning political support, it’s important to 

note that political support currently is doing the 

exact opposite – it is increasing exponentially. 

The most notable example of that is President 

Obama’s inclusion of funding within the 

American Recovery and Reinvestment Act for 

high-speed intercity rail, and his publicly laidout vision for building a network of high-speed 

train lines in this country. 

The President’s support of high-speed rail has 

served as a catalyst to build political support for 

the project at all levels. Members of California’s 

congressional delegation have publicly 

expressed support for the project, as have 

local governments and several California state 

legislators. 

To mitigate the risk of losing political support, 

the Authority will work diligently to build 

partnerships with elected officials and to inform 

them regularly about the project’s progress. 

This goes for our representatives in Washington, 

D.C.; our state Legislature; and locally elected 

officials. 

Additionally, the Authority will strive to maintain 

a project that is on track and on budget, and 

that places a premium on accountability and 

transparency. Through this, political support 

will remain. 

Legal Action

Legal action being brought against the 

Authority is a likely risk. Negative rulings in such 

lawsuits have the ability to set the project’s 

timeline back or even halt the project or 

sections of it for a time. 

The possibility of lawsuits is likely centered on 

environmental work or public outreach related 

to construction and mitigation factors. So, to 

mitigate the likelihood of such lawsuits and 

the merit behind such lawsuits, the Authority 

is committed to thorough and more-thanadequate environmental work. By conducting 

solid environmental studies, the Authority 

substantially reduces the risks associated with 

possible legal action. 

Additionally, the Authority is committed to 

copious amounts of public outreach, and in 

recent months, has taken steps to augment 

and improve its outreach efforts. By providing 

thorough, frequent, adequate, and easily 

accessible information about the project’s 

details and progress, we are confident that we 

can mitigate any possible risk that would result 

from inadequate outreach. 

Another legal difficulty could arise within the 

design and construction phase (licenses; patent 

rights; outsider suit; insider suit; force majeure; 
121

contractual issues due to misinterpretation, 

misunderstanding, failure, inappropriate 

strategy or contract) and is discussed within the 

design and construction risks section below.

Ridership Factors

Solid ridership projections are necessary to 

build support in the private sector for the highspeed rail project. If it were to be projected that 

potential ridership on the system would be low, 

private entities would be less willing to provide 

funding for the project, and since our financial 

plan requires private participation, that would 

represent a threat. 

The Authority’s ridership projections are based 

on a number of factors that could possibly 

change between today and the construction 

phase, and which would then increase or 

depress ridership projections. This is not a highly 

likely risk but is worth mentioning. 

Ridership estimates are in part based on 

population projections and on the cost of 

competing modes of transportation at the 

time that the system is operational. California’s 

population is expected to grow by a third, to 50 

million people, by 2030. If California’s population 

over the next couple of years was instead to 

begin to decrease, that would materially affect 

high-speed rail ridership estimates. Also, the 

price of gasoline could drop dramatically and 

affect the ridership estimates; or, mediumdistance airlines could improve efficiency and 

drop prices while adding additional routes, 

which would affect ridership projections. 

These possibilities would be mitigated by 

policies that continue to draw people to reside 

in California and that encourage high-speed 

rail as an alternative mode of transportation 

preferable to other modes. 

Federal Regulations

The Authority is coordinating closely with the 

Federal Railroad Administration and high-speed 

rail industry to develop U.S.-based HighSpeed Rail Express regulations and standards. 

Implementation of HSR Express in the United 

States requires a thorough assessment of the 

technical and operational safety risks, and 

application of best practices from existing 

systems to mitigate these risks. This is 

particularly critical as the California high-speed 

train project will be the first HSR Express system 

to be constructed and operated in the U.S. It 

is also important that the technical standards 

reflect an overall set of guiding principles, or 

system requirements, to ensure that all aspects 

of a high-speed rail network are addressed and 

integrated.

As we work to develop these standards, there 

is the possibility that necessary standards will 

be rejected, or that they will not be established 

in the timeframe necessary to match our 

timeframe for passenger service. However, 

mitigation for that possibility is already well 

underway. The Federal Railroad Administration 

is the agency that sets the safety standards to 

be met and is the Authority’s federal partner for 

environmental work on the California highspeed rail project. The FRA works with the 

Authority on a daily basis, is well-versed on the 

details of our project and its regulatory needs 

prior to service, and will serve as a vital partner 

in the process of pursuing and establishing 

these standards – standards that will serve 

subsequent high-speed rail lines in other states 

as well. 

Technical Peer and Industry 

Review

The California High-Speed Train Project, with 

operating speeds up to 220 mph, will be the 

first modern high-speed rail system in the 

United States to exceed speeds of 150 mph. 

This requires the development of technical 

standards for the design and construction 

to accommodate the higher speeds. The 

technology leading to 220 mph high-speed 

train service has been in development for 

decades around the world with most systems 

operating at 200 mph and two systems (Spain, 
122

China) operating or soon-to-be operating at 220 

mph. Many of these systems can be referenced 

for the development of U.S.-based technical 

standards. 

For the past decade, the California High-Speed 

Rail Authority has been in regular discussion 

with nearly all of the operating high-speed rail 

operators and many of the manufacturers of 

high-speed train equipment around the world. 

These discussions include technical working 

groups to solicit technical peer and industry 

review in two primary areas: technical feasibility 

and manufacturing practicality. High-speed 

train systems are made up of highly technical 

subsystems that are optimized to work together 

to maximize safety and reliability. To confirm 

that the California project’s technical approach 

is consistent with state-of-the-art practice, 

dozens of reviews and discussions have taken 

place during the development of the California 

high-speed train project. These include 

operators, infrastructure owners, international 

high-speed rail technical services organizations 

and manufacturers from France, Japan, 

Germany, Spain, China, Taiwan, and Korea.

Right-of-Way Preservation and 

Acquisition

The high-speed train project, of course, hinges 

on the ability to obtain the right-of-way in 

which to build it. Inability to obtain adequate 

right-of-way would delay or prevent the system 

from being built. Primarily, any delay would 

come in the form of lawsuits seeking to prevent 

the Authority from acquiring a property. 

The Authority plans to mitigate this risk through 

negotiations and by offering fair prices for rightof-way property. The Authority aims to settle 

disputes through negotiation and through 

transactions that are satisfactory to all parties. 

However, while it is not a tool the Authority 

wishes to employ nor will employ lightly, it 

should be noted that eminent domain is a tool 

the Authority has. 

The Authority, with its program management 

team and regional consultant support, will lead 

the right-of-way preservation and acquisition 

tasks. This work will include identification of “atrisk” parcels, preparation of survey documents 

and legal descriptions, and preparation for 

property acquisition negotiations.

Design and Construction Risk

Design and construction risk is generally 

associated with delays in construction and 

increases in construction costs. To reduce and 

limit the Authority’s exposure to these risks, 

the Authority will take the necessary steps to 

share and/or transfer this risk with their private 

partners through innovative procurement 

and contracting methods. These contracting 

methods should ensure on-time delivery at a 

high level of performance by contractors by 

linking a large amount of their compensation to 

meeting project completion and performance 

standards, to cost overruns and delays in 

completion subject to significant penalties.

Effective design and construction risk 

management is essential to achieving 

a successful overall project. Therefore, 

incorporating risk analysis as an integral part of 

project delivery is key to project success. Risk 

management begins with identification of risk, 

developing a thorough understanding of their 

impact, and finally implementing risk mitigation 

measures into the procurement and project 

development process. To manage systematically 

with the various risks encountered on projects, 

a detailed listing of key project design- and 

construction-related risks are presented below 

grouped according to the primary source of risk 

rather than their associated effects:

EXTERNAL RISK 

•	 Regulatory Risk (unanticipated 

government intervention in dealing with: 

environmental issues; design and/or 

production standards; site selection and 

location; or special requirements)

•	 Natural Hazards Risk ( such as: corridor 

location; storms and/or floods; and 

earthquake)
123

•	 Completion Failure (failure of the 

supporting infrastructure due to others, 

such as design failure, or, execution of 

supply contracts due to bankruptcy or 

receiverships, etc.)

•	 Other Potential Risks include but are not 

limited to (vandalism; sabotage; indirect 

effects such as environmental and/or 

social; failure to provide financial support 

through the end of the project; or the 

lack of final project acceptance by the 

Authority)

EXTERNAL PREDICTABLE RISK 

•	 Market Risks (availability of materials; 

material escalation; demand on critical 

elements; or economic unrest)

•	 Operational Risk (such as not properly 

identifying or dealing with maintenance 

needs; safety issues; or fitness for purpose)

•	 Environmental; Social Inflation; and 

Taxation Risks

TECHNICAL RISK

•	 Changes in Technology (rendering parts 

obsolete; discontinuation of parts; new 

technology complexity on the existing 

system rendering it obsolete) 

•	 Performance (compromised quality and 

reliability due to design inadequacies; or 

sheer size and complexity of the project)

NON-TECHNICAL RISK

•	 Managerial Risk (lack of organizational 

structure; lack of appropriate policies 

and procedures; inadequate project 

management; staff changes; and 

inadequate planning and unrealistic 

completion schedule)

•	 Schedule Risk (delays and time overruns 

due to: regulatory approvals; labor 

shortages; productivity; stoppages; 

material shortages or late deliveries; 

unforeseen site conditions; accident or 

sabotage; scope changes)

•	 Cost Risk (overruns due to: schedule delays; 

inappropriate procurement strategies; 

contractor claims; management and/or 

workforce inexperience)

Cash Flow Risk 

LEGAL (generally controllable)

•	 Difficulties arising from any of the 

following: licenses; patent rights; 

outsider suit; insider suit; force majeure; 

contractual issues due to misinterpretation, 

misunderstanding, failure, inappropriate 

strategy or contract

With different project delivery options at its 

disposal the Authority will develop and employ 

strategies to evaluate and select the appropriate 

procurement methodology and approach. While 

many of the traditional evaluation criteria for 

procurement of engineering services still apply, 

the ability to evaluate contractors on more than 

a “reasonable and responsive bid” will introduce 

myriad new challenges to the procurement 

process. To facilitate a smooth procurement 

process, and ultimately successful delivery, it 

is important to maintain two closely linked 

processes moving forward. 

The ideal project delivery method and 

procurement strategy should result in a highquality facility at the earliest possible time for 

the lowest overall lifecycle cost (construction 

and operations and maintenance). So how 

will the Authority find this optimal strategy? 

As the owner of the facility, the Authority is 

in the best position to evaluate the specific 

issues surrounding the project. Things such 

as stakeholders, schedule, budget constraints, 

the ability to manage, and the level of the 

Authority’s involvement are all taken into 

consideration in selecting a delivery method 

and procurement strategy. The project delivery 

methods and procurement strategies evaluated 

for our efforts included:
124

•	 Design-Bid-Build

•	 Construction Management at Risk 

•	 Design-Build 

•	 Progressive Design-Build

•	 Multiple Prime Contracts

•	 Performance-Based Delivery

The DESIGN-BID-BUILD procurement and 

contracting strategy is the most common 

contracting strategy in use today, and could be 

used if:

•	 The Authority were seeking the lowest 

initial capital cost as exhibited by low 

bid and, the project were not schedulesensitive

•	 Major changes to the project were unlikely 

due to the completeness of the plans and 

specifications, and creativity (or best value) 

is not sought from proposers/bidders

•	 The Authority wants to exercise complete 

control over the design efforts, and thereby 

assume major portions of the risks (the 

Authority warrants the sufficiency of the 

plans and specifications to the contractor)

•	 The delay in knowing actual construction 

costs and cash flow requirements were 

not critical (low bid is not know until after 

construction bid opening. Re-bid may 

be required should the bids exceed the 

Authority’s budget) 

CONSTRUCTION MANAGEMENT at RISK was 

reviewed and deemed best if:

•	 The compression of the overall project 

schedule was important or the schedule is 

difficult to define

•	 The Authority needs to maintain a set 

budget number or needs to know the 

financial cost guarantee earlier in the 

process

•	 Early construction input was needed 

because the construction is expected to 

be difficult to manage, and the Authority 

also wishes to influence selection of 

equipment, material or subcontractors

•	 The Authority was looking to ultimately 

transition to D-B format; or an open-book 

and joint decision-making with contractor 

is desired

The DESIGN-BUILD procurement and 

contracting approach is believed best if:

•	 The Authority were seeking potential cost 

reductions (the D-B contractor performing 

the design has a better feel for the 

constriction cost of various alternatives 

(i.e., value engineering occurs throughout 

the proposal process)

•	 Shortened project completion timeframes 

were desired (fast-track construction is 

possible)

•	 Reduced exposure to claims was desired 

(the D-B entity is responsible for preparing 

the plans and specifications and may also 

be responsible for differing site conditions)

•	 The Authority was looking for innovation 

and incorporation of new technologies, 

possibly through paying a stipend to get 

the intellectual property and creative 

design ideas from unsuccessful proposers 

to incorporate into the project

•	 The project had significant complexities 

and the Authority was seeking to assign 

the risk to an entity better able to manage 

it (eliminates contractor claims to the 

owner for field issues that result from 

design or constructability issues)

PROGRESSIVE DESIGN-BUILD is a variation 

on Construction Management at Risk and was 

considered: 

•	 Progressive Design-Build is a relatively new 

design and construction management 

concept whereby the design and 

construction of the project are procured 

from a single entity primarily based on 

qualifications 

•	 The selected design builder completes the 

design to between 30 to 60 percent and 

then submits a lump sum or guaranteed 

maximum price for the project to the 

Authority for approval.
125

– A significant feature of Progressive DesignBuild contract is the fact that should the 

Authority and design-builder not be able 

to reach agreement on an acceptable price, 

the Authority could then:

• Negotiate with another qualified 

design-build team, or 

• Take the partially completed 

design and use it as the basis for 

completing the design, or 

• Complete the design and 

proceed with a Design-Bid-Build 

procurement

MULTIPLE PRIME CONTRACTS as presented 

below were viewed as not being viable 

procurement and project delivery methods for 

this project for the following reasons:

•	 Multiple Prime contracts are typically used 

on vertical construction where an owner 

divides the project in parts or phases and 

enters into separate contracts for each 

part or phase (e.g., site development, 

excavation, structural, mechanical, 

electrical).

•	 Additionally, multiple prime contracts 

require careful coordination because 

multiple contractors are involved, and no 

single contractor is responsible for the 

entire project.

PERFORMANCE-BASED procurement and 

project delivery is a variation of Design-Build 

designed to streamline the procurement cycle. 

Performance Based procurements efforts focus 

their efforts on defining the purpose of the 

work to be performed, as opposed to either the 

manner in which the contractor must perform 

the work or the means and methods that must 

be used by the contractor. 

•	 Performance-based contracting holds the 

Authority accountable for establishing 

clear performance expectations and the 

contractor accountable for achieving those 

expectations.

•	 With the performance-based design-build 

procurement, the Request for Proposals 

generally does not include design 

drawings. But rather it sets forth standard 

construction specifications to establish 

minimum quality standards and focuses 

as much as possible on, measurable 

performance criteria or objectives, rather 

than on specific design approaches to 

achieve those objectives. Allowing for 

creativity while providing the Authority 

with access to the innovative and costeffective commercial services or products.

With careful planning and good management 

some inherent risks in the project development 

process can be substantially reduced or virtually 

eliminated. The Authority’s steps towards 

achieving this goal include:

•	 Incorporating a thorough and realistic 

appraisal of the project concept and scope, 

conducting a realistic estimate of time and 

costs for the defined scope and quality, 

and making contingency allowances where 

scope or work is uncertain 

•	 Development of a sound procurement 

strategy designed to optimize performance 

that is supported by the appropriate 

organization structure and responsibility 

distribution. This effort includes:

– Examining the contract documents for 

risk, clarity and potential sources for 

misunderstanding

– Seeking innovative but practical 

solutions to offset potential risk areas

– Recognizing that risk and reward go 

together

– Preparing contingency action plans and 

work-arounds

•	 The Authority will also use more traditional 

performance bonding to create incentives 

for its contractors to fulfill the contractual 

obligations. If such obligations are not 

met or fulfilled, then the Authority would 

seek payment for damages under the 

performance bond
126

As presented herein, the appropriate design 

and construction procurement strategy 

selection depends on the type of project; its 

particular emphasis on scope, quality, time and 

cost, and the degree of uncertainty associated 

with each. The Authority’s approach to risk 

management consists essentially of four process 

phases, namely:

Phase-I Risk Identification

Phase-II Risk Assessment

Phase-III Risk Response 

Phase-IV Action Documentation 

Therefore, the selection of the right contract 

requires:

•	 The identification of specific risks

•	 Determination of how they should be 

shared between parties, and

•	 The insertion of clear language in the 

contract documents to put it into effect.

Unpredictable Events

Though impossible to predict, it’s worth 

mentioning the threat of significant events, 

such as natural disasters that, if they occurred, 

could delay or stop the high-speed train project. 

A large-scale earthquake or historic wildfire 

that destroys significant amounts of existing 

infrastructure could divert state and local 

infrastructure investment funding toward repair 

and rebuilding and away from new projects 

such as high-speed rail. 

The Authority does not have plans to prevent 

such a disaster, and in such an event would 

support rebuilding and repairing California’s 

existing infrastructure as a priority over highspeed rail development. 
D E C E M B E R 2 0 0 9

127

Oversight

Project Oversight and Controls

The California High-Speed Rail 

Authority and the state’s highspeed train project are subject to a 

comprehensive system of external 

controls, oversight and review – 

more so perhaps than any other 

capital or construction project 

in the history of the state. Over 

the 13-year life of the Authority 

and its work in developing the 

train project, there has been and 

continues to be more analysis, 

discussion and review of the project 

than that of any other single or 

comparable large-scale public 

transportation project in the state. 

The uniqueness and enormity of 

the project, make this scrutiny 

appropriate and provide greater 

assurance that the public’s interest 

will be protected and that the 

project’s success will be realized.

Authority Board and Appointments

The Authority’s nine-member Board of Directors is the main, 

regular oversight of the Authority’s activities. The appointment 

of Board members is made by a trio of entities – the governor 

(5 appointees), the Assembly (2) and the Senate (2). This body 

provides the first level of public transparency and accountability. 

The Board is subject to California’s open public meetings laws; 

therefore, the Authority’s monthly Board meetings, agenda 

and notice requirements, along with the opportunity for public 

participation and comment at those meetings, complement 

the appointment procedures and responsibilities and provide 

a transparent view of the project’s progress, policies and 

administration.

Legislation and Initiatives 

The high-speed train project and the actions of its Board, staff 

and contractors are controlled and governed by a series of 

legislatively enacted statutory provisions, both general and 

specific to the project, and the extensive requirements of the 

voter-approved Proposition 1A. 

Senate Bill 1420 (1996), the Authority’s enabling statute, and 

subsequent legislative vehicles charge the Authority with 

developing and implementing intercity high-speed rail service 

that is fully integrated with the existing intercity rail and bus 

network, commuter and rail transit lines and other transit 

services at common facilities. As prescribed in the statutes, the 

Authority previously submitted a number of feasibility, business 

and financial plans to the Legislature. It also prepared and 

crafted, with the Legislature and Governor Schwarzenegger, a 

plan for the construction and operation of a high-speed train 

system in the form of Assembly Bill 3034, that was placed before 

and approved by state voters in November 2008 as Proposition 

1A (Prop. 1A).

Proposition 1A

Prop. 1A is comprehensive and prescriptive in terms of oversight 

and accountability of the state’s high-speed train project. By the 

proposition’s enactment by state voters, Prop. 1A establishes 

a host of mandatory financial, service, regulatory and review 

procedures and requirements. 

The Authority must establish an independent peer review group 

to analyze and comment on the elements of the individual 
128

corridor funding plans, with specific members of 

the eight-person peer review group designated 

by the state Treasurer; the Controller; the 

Director of Finance; and the Secretary of 

Business, Transportation and Housing. 

Ninety days before submitting an initial 

request to the governor and the Legislature 

for bond funds to pay the capital costs on a 

project segment, Proposition 1A requires that 

the Authority must first approve and submit 

a detailed funding plan for the corridor to the 

Director of Finance, the peer review group, and 

the transportation policy and fiscal committees 

of the Legislature. The plan must include myriad 

specific items and project information for 

legislative and administrative review (subject 

to an exception for certain limited costs). The 

Authority also must submit a second funding 

plan to the Director of Finance and the Joint 

Legislative Budget Committee that covers 

topics and project items similar to those in 

the first report plus any material changes in 

that report’s information since its submittal. In 

addition, the Authority must provide a report 

by an independent firm or firms verifying that 

the project can be constructed as proposed. 

Only after the Director of Finance finds that the 

plan is likely to be successful can the Authority 

commit funds for construction and real property 

and equipment acquisition (subject to an 

exception for certain limited costs). 

Finally, the Authority must inform the governor 

and the Legislature of any material changes in 

the plan that would jeopardize its success.

Budgetary Oversight

Oversight of the Authority and the high-speed 

train project extends to the annual state budget 

process and involves a collection of control 

entities, including the Department of Finance 

(DOF), Governor’s Office, Legislative Analyst’s 

Office (LAO) and the Budget Committees of the 

Legislature. 

Like other state agencies, the Authority annually 

must prepare a proposed budget for the next 

fiscal year, accompanied by a program of work 

activities for review and approval by the DOF 

and inclusion in the governor’s proposed 

budget in January. The budget’s release is 

followed by the preparation and publication 

of the LAO’s analysis and recommendations 

on the Authority’s proposed expenditures and 

work programs. Subsequently, the respective 

budget subcommittees of the two houses 

conduct hearings on the budget and the LAO’s 

recommendations before taking action on an 

appropriation amount and potential controls 

on the expenditure of the budget funds. These 

actions may be repeated in some measure after 

the release of the governor’s May Revise of the 

original budget proposal. 

The Legislature exercises further collective 

oversight of the Authority’s finances through 

the Budget Conference Committee, which 

considers and resolves any differences in the 

two houses’ recommended budget actions. 

The conference body produces a final budget 

that in turn must be approved by both houses 

of the Legislature and ultimately be submitted 

to the governor for final review and approval, 

including possible reductions in the Authority’s 

individual appropriation.

Legislative Policy and Fiscal 

Oversight

The Authority is also subject to review by the 

standing policy and fiscal committees of the 

Legislature which exercise their own oversight 

and assessment of the Authority’s operations. 

Informational and oversight hearings of the 

transportation policy committees especially 

provide forums for focused and in-depth 

supervision of the high-speed train project’s 

progress. 

There are special select committees on transit 

and rail that conduct their own meetings 

and inquiries and the operations of the Joint 

Legislative Audit Committee that also serve 

to monitor the progress of the state’s highspeed rail development. In addition to such 

examinations, the several committees regularly 

request and are provided specific information or 

responses to written and verbal inquiries about 

the Authority’s operations and project activities. 
129

FUNDING PLAN REVIEW AND APPROVAL PROCESS
130

FUNDING PLAN REVIEW AND APPROVAL PROCESS
131

Finally, the policy and fiscal committees provide 

review and oversight during hearings on 

individual legislative measures when such bills 

come before the committees for consideration 

and action. 

Control Agency Review

The Authority’s operations and project work 

are conducted under the usual supervision of 

a number of state control agencies, the same 

regulation and administration as that for other 

state departments and entities. In addition to 

the budget-approval and monitoring role of 

the Department of Finance, the Authority must 

adhere to the various legal procedures and 

requirements administered by the Department 

of General Services (contracts), State Treasurer’s 

Office (bond requirements), Department of 

Transportation (personnel), State Controller’s 

Office (claims and payments), and so on. The 

Attorney General provides legal oversight 

and counsel on myriad Authority matters and 

activities and as previously mentioned, the State 

Auditor provides formal audit supervision and 

review as approved through the Joint Legislative 

Audit Committee.

Peer Review

AB 3034 created an eight-member independent 

peer review group to review the planning, 

engineering financing and other elements 

of the Authority’s plans, and will provide 

the Legislature with an analysis of the 

appropriateness and accuracy of the project’s 

assumptions and the plan’s viability. The 

Treasurer, Controller, Director of Finance, 

Secretary of Business, Transportation and 

Housing are responsible for designating 

specified members of the peer review group 

according to the expertise and experience 

requirements in AB 3034. Other peer review 

arises from the exchange of information and 

consultation with the Authority’s numerous 

international partners under memoranda 

of understanding with other countries’ 

federal transportation, and rail (including 

high-speed train) ministries, as well as those 

for development, energy, ecology, and 

infrastructure, etc. The agencies, and private railrelated companies associated with the various 

government entities, provide a steady stream of 

evaluation and expertise to the Authority staff 

and the board members to foster and facilitate 

the successful development of the California 

high-speed train project.

Ongoing/Future Reporting 

Requirements – SB 783

The Authority and the high-speed train project 

will continue reporting to the Legislature as 

a result of the enactment of Senate Bill 783 

(Ashburn, 2009). SB 783 requires the Authority 

to prepare, publish, adopt and submit to the 

Legislature after public hearings, additional 

business plans beginning January 1, 2012 and 

every two years thereafter. Like the current 

plan, the future reports will address the 

finances, patronage, right-of-way acquisition, 

environmental clearances, construction, 

equipment, operations and a host of additional 

subjects that comprise the project and its 

implementation.

 At present time, only three slots on the 

eight-member review group are filled. Those 

members are John Chalker, Founder of LM 

Capital Group, LLC; Lou Thompson, Principal 

of Thompson, Galenson & Associates, LLC; 

and Will Kempton, CEO of the Orange County 

Transportation Authority. 

Program Management Oversight 

and Local Agreements

The Authority is committed to further 

professional and expert oversight through 

the retention of an independent program 

management oversight (PMO) team. The 

PMO reports directly to the Authority and is 

responsible for monitoring and reviewing 
132

the performance of the program manager 

(Parsons Brinckerhoff), determining the PM’s 

compliance with the agreed project budget, 

services and schedule objectives and assessing 

the appropriateness of procedures and methods 

used to implement and complete the project. 

The Authority also has a growing number of 

local cooperative agreements that provide 

a means to ensure the consideration and 

implementation of the best project alternatives 

in each community served by the high-speed 

train project. The agreements enunciate 

objectives, establish working groups, and 

enumerate tasks and responsibilities to 

share and coordinate the Authority’s and 

local agencies’ respective resources toward 

implementation of a phased joint program 

of high speed rail and commuter rail rapid 

transit services. The agreements serve to 

provide cooperation and coordination as well 

as adequate oversight and the effective use of 

available financial and personnel resources in 

each project area.

Recovery Act Oversight

Additionally, the awarding of American 

Recovery and Reinvestment Act (ARRA) funding 

triggers an extensive series of reporting and 

oversight requirements prescribed by the 

federal government. The Authority anticipates 

being awarded a portion of the $8 billion 

set aside within the ARRA for high-speed 

intercity rail. That will necessitate that the 

Authority submit detailed reports not just 

to the Federal Railroad Administration and 

the U.S. Department of Transportation, but 

also be subjected to oversight by the federal 

Government Accountability Office and 

congressional committees and subcommittees. 

The California Governor’s Office has established 

a Recovery Act Task Force, and the Authority 

would also have to report to that entity, with 

another vigilant layer of oversight in the Office 

of the Inspector General, a position created 

by Governor Schwarzenegger to watchdog 

stimulus funds in California and ensure they 

are spent appropriately. 

Other steps will be taken to maintain 

transparency and offer opportunity for 

on-going oversight:

•	 Public meetings

•	 Weekly executive summaries 

•	 Posting of materials/documents 

on Web site

•	 Consultation with legislative staff
D E C E M B E R 2 0 0 9

133

This document serves as a snapshot in time of a dynamic project 

that will continue to evolve as it moves from one phase to the 

next. It shows that the state’s high-speed train project is on track, 

and that it has gained additional momentum in recent months. 

The Authority is committed to regularly updating this document 

to ensure legislators and the general public are informed about 

the progress and changes to the plan to design, build and 

operate a high-speed rail system in California. 

Outside of this document, the Authority is committed to 

frequently updating the public and the Legislature on the 

project’s progress, which it will do through a variety of means, 

including regular email communication, its Web site, public 

meetings and more. 

A high-speed rail system is needed in California. As Proposition 

1A shows us, it is wanted in California. Examples from around the 

world tell us such a system is viable here. And building such a 

system will bring hundreds of thousands of jobs now, when our 

state and economy need them most.

For additional updates and information on the California HighSpeed Train Project, please visit the Authority’s Web site at 

www.cahighspeedrail.ca.gov

or contact the Authority at

California High-Speed Rail Authority

925 L Street, Suite 1425, Sacramento, CA 95814 

or by telephone at (916) 324-1541. 

Conclusion
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D E C E M B E R 2 0 0 9

AB 4x1 Checklist

Below is language directly from the Budget Act of 2009 and the 

corresponding language, elsewhere in this document, responding 

to the bill language. 

Assembly Bill 1 from the 4th extraordinary session of the state Legislature, the Budget Act of 

2009, requires that the Authority submit ... a revised business plan to, and a 30-day review by, 

the Joint Legislative Budget Committee that, among other things, addresses, at a minimum:

•	 a plan for a community outreach component to cities, towns, and neighborhoods 

affected by this project , 

“Between today and the commencement of construction, there will be ample and 

significant opportunities for public input and interaction. These opportunities are 

detailed in the section below.”

(From Section “Outreach,” Page 53)

“Ogilvy Public Relations Worldwide was chosen in November as that new 

contractor, and is expected to begin work with the Authority in January 2010.”

(From Section “Outreach,” Page 54)

“To achieve its outreach goals, the Authority employs a number of tools, 

outlined below.”

(From Section “Outreach,” Page 54)

“Additionally, the Authority’s program management team has committed to 

training its regional managers in Context Sensitive Solutions, an outreach tool 

being employed with the communities in the Bay Area’s Peninsula that is a 

collaborative, interdisciplinary approach that ensures input from all stakeholders. 

By ensuring that the high-speed rail project’s regional managers are trained in this 

collaborative public engagement mindset, the Authority believes outreach efforts 

will improve in quality.”

(From Section “Outreach,” Page 56)

•	 further system details, such as route selection and alternative alignment 

considerations ,

“The environmental process for each of the high-speed train project sections in both 

initial and subsequent phases has been initiated. The status of the work prepared for 

each section as of December 1, 2009, is shown in the exhibits below and summarized 

as follows.” 

(From Section “From Today to Passenger Service,” Page 29)
135

•	 a thorough discussion describing the steps being pursued to secure financing , 

“New funding sources, specifically for high-speed rail, along with the expansion 

of existing transit programs, will need to be created in order to provide adequate 

support for the high-speed train. Project proponents argue that a focus on 

investing in America’s overall transportation system, as opposed to individual 

modal investments, would encourage more efficient allocation of transportation 

dollars and likely increase the proportion of funding provided for rail projects. 

As mentioned above, short term funding for high-speed trains is anticipated 

through the annual transportation appropriations process as a new transportation 

authorization has yet to come to the floor. The surface transportation 

reauthorization provides the opportunity for the Authority and other states 

developing high-speed rail to seek a long-term dedicated funding source. In fact, 

the Authority has already begun to advocate for dedicated federal funding for 

high-speed trains, working with members of California’s congressional delegation.

(From Section “Paying for the System,” Page 97)

“Expansion of existing federal funding programs, as well as significant new 

initiatives, will be required to support California’s high-speed train at the levels 

assumed in this financing plan. Modification of existing federal financing terms 

and restrictions also would make the project more attractive to private investors, 

thereby facilitating achievement of the targeted private sector funding levels, as 

well.” 

(From Section “Paying for the System,” Page 98)

“The Authority plans to develop plans to solicit and develop a process for 

formalizing local support over the next several months.”

(From Section “Paying for the System,” Page 99)

“One way for local governments to realize significant local revenues from real estate 

appreciation along the alignment is through Transit-Oriented Development (TOD). 

TOD would allow local governments to benefit from the development of highspeed trains with increased real estate tax revenues from increased density without 

burdening the balance sheets of local governments. The Financial Plan presumes 

that the Authority would work closely with each local agency to explore and adopt 

TOD agreements. ... In addition to TOD, the implementation of publicly established 

benefit assessment districts and the Mello Roos districts near a transit or rail facility 

are alternative ways to raise development-related revenues that can be financed.”

(From Section “Paying for the System,” Page 99)

“Commercial concessions at stations are important tools to realize additional locally 

generated revenues. These concessions include retail stores, advertising, parking, 

and other commercial revenues. The Financial Plan presumes that the Authority 

would work closely with appropriate local agencies to explore and adopt station 

commercial concessions before stations are built.”

(From Section “Paying for the System,” Page 100)
136

•	 a working timeline with specific, achievable milestones , and 

“San Francisco – Anaheim Master Summary Schedule 

– Program Management Activities 

(From Section “From Today to Passenger Service,” Page 51)

•	 what strategies the authority would pursue to mitigate different risks and threats . 

“A project of this size, scope and nature faces a number of risks that could 

jeopardize its completion. Any frank discussion of the project and its planning 

must include these risks, and any credible plan for the project must address 

how these risks would be mitigated. This section describes those risks in a frank 

manner and notes the manner in which the Authority plans to mitigate them. 

General categories of risk include funding, politics, litigation, federal regulations, 

construction, and unpredictable events.”

(From Section “Risks and Mitigation,” Page 119)

•	 The revised business plan shall also provide additional information related to: 

funding ,

“The following financial plan will outline each of the various funding sources with 

details on the Authority’s financial assumptions. This includes $9 billion from state 

funds, available through the Safe, Reliable High-Speed Passenger Train Bond Act 

for the 21st Century, approved by California voters as Proposition 1A in 2008. The 

Authority is also seeking approximately $17-$19 billion in federal funding. Part of 

the overall federal input includes the American Recovery and Reinvestment Act 

(ARRA) based on the Authority’s recently submitted an ARRA application totaling 
137

$4.7 billion for four different construction sections and additional environmental and 

engineering funds. The Authority is targeting $4-$5 billion in local support and through 

such public-private partnerships (P3s) such as transit-oriented development, parking 

concessions and naming rights opportunities.

From Section “Paying for the System,” Page 92)

“As demonstrated in the previous section on ridership and revenue, the initial San 

Francisco-to-Anaheim portion of the project is expected to generate significant 

operating surpluses even after accounting for operations and maintenance costs and 

renewal and replacement reserves. This dedicated and significant revenue stream 

after full San Francisco-to-Anaheim operation begins will provide the Authority with 

an opportunity to seek innovative P3s to provide capital funding to help complete the 

system. The Authority is targeting $10-$12 billion in P3 funding.”

(From Section “Paying for the System,” Page 92)

•	 project development ,

“The environmental process for each of the high-speed train project sections in both 

initial and subsequent phases has been initiated. The status of the work prepared for 

each section as of December 1, 2009, is shown in the exhibits below and summarized 

as follows.” 

(From Section “From Today to Passenger Service,” Page 29)

•	 schedule,

“The following Master Summary Schedule for the San Francisco to Anaheim portion 

of the CHSTP is split in two parts: program management activities and right-ofway acquisition and construction activities. Together they show major program 

management activities and currently projected timelines for the regional projectlevel environmental review/preliminary engineering, target NOD/ROD milestones, 

procurement activities, final design/construction durations, testing/acceptance, and 

pre-revenue operations leading to the start of initial revenue service in 2020.”

(From Section “From Today to Passenger Service,” Page 51)

•	 proposed levels of service,

“In order to prepare a ridership and revenue forecast, a schematic operations plan 

is needed, providing how often trains will run, which stations they will stop at, and 

how long they take between station stops. This is done both for the peak morning 

and afternoon travel times, and for an off-peak period for the remainder of the day. 

Table A shows the schematic operations plan developed from ongoing ridership and 

operations planning for the initial phase of service in the peak period southbound. The 

northbound service plan mirrors the southbound.”

(From Section “Ridership, Revenue & Operations,” Page 66)

•	 ridership,

“Riders and revenues are presented below for the year 2035, as well as for start-up in 

the year 2020.”

(From Section “Ridership, Revenue & Operations,” Page 65)
138

•	 capacity,

“This forecast and operating plan for an initial phase of service between Anaheim 

and San Francisco are based on using single-level trainsets either singly with 450-

500 seats each or two sets coupled together with 900-1,000 seats. In the year 2035, 

270 trains operate throughout the day, in a mix of express non-stop service and 

shorter-distance limited service.”

(From Section “Ridership, Revenue & Operations,” Page 65)

“A total of 65 trainsets are needed to handle the service, before accounting for 

second sets, spare sets to provide service in case of mechanical problems, and outof-service maintenance needs. The next step was to determine how many trains 

required the doubling of capacity by coupling a second trainset.”

(From Section “Ridership, Revenue & Operations,” Page 76)

•	 operational plans,

“This peak schematic pattern provides 57 trains in each direction in 6 hours, for an 

average of just under 10 trains per hour. The off-peak for the initial phase of service 

provides 71 trains in each direction over a 10-hour period, for an average of 7 trains 

an hour.”

(From Section “Ridership, Revenue & Operations,” Page 66)

“The detailed operations plan incorporates the schematic operating pattern shown 

earlier for ridership forecasting. The types of trains in the pattern (express, local, 

limited stop) were arranged into a repeating hourly “clock-face” pattern to make the 

service more regular and predictable, and to reduce the number of different kinds 

of overtakings (i.e. express trains passing limited trains) that would be required. The 

minimum time between trains following each other past a given point was set at 

three minutes, based on the practical capacity of the signal and train control system. 

Overtakes were arranged at intermediate stations, with local stopping trains pulling 

off the main track to the platform, allowing the non-stop train to pass. Although 

stations stops were swapped among some of the local and limited stop trains 

to make the schedule work better, the service levels between station pairs were 

kept at the same level. Figure 3 shows a typical morning peak hour of the detailed 

operational timetable, running south from San Francisco Transbay and the spur from 

Merced joining the main line north of Fresno.”

(From Section “Ridership, Revenue & Operations,” Page 74)

“Table H - Key operations parameters Initial Phase, 2035, HST fares 83% of air”

(From Section “Ridership, Revenue & Operations,” Page 79)

“Figure 8 - Operations cost by year – Initial Phase (2009$$)”

(From Section “Ridership, Revenue & Operations,” Page 80)

“Table I - Initial Phase Operating cost by category, 2035, HST fares 83 % of air”

(From Section “Ridership, Revenue & Operations,” Page 81)
139

“Table J - Initial Phase Operating Results, 83% of air fares, Year of Expenditure $$”

(From Section “Ridership, Revenue & Operations,” Page 82)

•	 cost,

“The following section will for the first time describe the estimated cost of the project 

in year-of-expenditure (YOE) dollars, as was required in the application for American 

Recovery and Reinvestment Act funds, and as compares to the $9 billion in bond funds 

made available by the passage of Proposition 1A. This way of preparing the estimate 

provides a more credible view of the cost of the project in the year in which it is 

expected to be constructed, and the projected cash flow by year. 

(From Section “Cost of the System,” Page 84)

“The updated cost estimate for the San Francisco-to-Anaheim initial high-speed rail 

system in current year dollars is $35.7 billion. This reflects inflation costs between 2008 

and 2009, as well as section cost updates. Adjusting the project cost for YOE dollars 

brings an updated cost estimate of $42.6 billion. Almost 80 percent of that cost change 

is attributable to inflation. In other words, only about 20 percent of the estimated cost 

increase (about $2.3 billion) is due to real cost growth due to refinements in estimated 

unit costs and updated quantities attributable to updated section configurations and to 

other revisions described below.”

(From Section “Cost of the System,” Page 84)

•	 private investment strategies,

“One of the ways the Authority would like to leverage public funds for this project 

is through pursuing public-private partnerships. High-speed rail, unlike most transit 

services, is expected to generate significant operating surpluses. These operating 

surpluses are the basis for the Authority’s plans to engage private sector support. 

Private funding through public-private partnership arrangements is an increasingly 

accepted method to support the development of infrastructure projects. Based on 

this premise, the Authority’s Financial Plan is targeting $10 to $12 billion (in year of 

expenditure dollars) from potential private sources for the San Francisco-to-Anaheim 

segment. This investment is primarily backed by the high-speed rail’s projected future 

operating surpluses as well as some type of revenue guarantee and is based on a level 

of risk and capital markets terms that the team believes are appropriate for this type of 

project. To gain a better understanding of private interest in the project, the Authority 

issued a Request for Expressions of Interest (RFEI) in the Spring of 2008. Since that time, 

the Authority has continued to reach out to private industry leaders with experience in 

High Speed Rail and other large infrastructure projects. Results of the RFEI have shown 

that private sector interest is strong and diverse; however, public support, both financial 

and political, is needed to generate private funding commitments.”

(From Section “Paying for the System,” Page 101)
140

(From Section “Paying for the System,” Page 102)

“Over the past two years, the Authority has undertaken extensive work to gauge 

and encourage private sector interest in the High Speed Rail project. In March 2008, 

the Authority issued a Request for Expressions of Interest (“RFEI”). The purpose of 

the RFEI was to gain a better understanding of how the Project could benefit from 

private sector participation and to gauge the level of private interest in the Project. 

... Since the RFEI in 2008, the Authority has continued to reach out to the private 

sector to gauge interest in the project as well as seek guidance on technical and 

procurement issues. ... The Authority is once again planning to consult the private 

sector as it moves forward with the beginnings of a procurement process in 2010.” 

(From Section “Economy/Climate Right Now,” Page 111)

•	 staffing , and

“To date, the California High-Speed Rail Authority has been a planning organization, 

staffed by a small number of state employees, relying largely on contract services, 

and governed by a nine-member board of directors. However, now the Authority 

must transform into an implementation entity responsible for what will be the 

largest public works infrastructure project in state history. This section describes 

the current organization and the steps necessary to grow it into a state entity 

overseeing construction of the state’s high-speed train system.”

(From Section “The High-Speed Rail Authority,” Page 9)

•	 a history of expenditures and accomplishments to date . 

“Over the course of its 13-year history, the Authority’s budget has varied and has 

come from a variety of funds, including those from regional partner transportation 

agencies. Below is a chart showing the Authority’s funding since its inception, the 

sources of those funds, and the activities on which they were expended.”

(From Section “The Project and Its History,” Page 8)
141

“The program-level EIR/EIS was certified in 2005.”

(From Section “The Project and Its History,” Page 6)

“An additional program-level EIR/EIS was certified in 2008 that examined the path 

between the Central Valley and the Bay Area.”

(From Section “The Project and Its History,” Page 6)

“San Francisco to San Jose Section: Scoping was initiated in December 2008. Three 

scoping meetings were held in San Mateo County, San Francisco, and Santa Clara 

County in January 2009.” 

(From Section “From Today to Passenger Service,” Page 30)

“San Jose to Merced Section: Scoping was initiated in March 2009. Scoping meetings 

were held in San Jose, Merced, and Gilroy in March 2009.” 

(From Section “From Today to Passenger Service,” Page 32)

“Scoping was initiated in February 2009. Scoping meetings were held in Merced, 

Madera, Fresno, Visalia, and Bakersfield in March 2009.”

(From Section “From Today to Passenger Service,” Page 33)

“Bakersfield to Palmdale Section: Scoping was initiated in September 2009. Scoping 

meetings were held in Bakersfield, Tehachapi, and Palmdale in September 2009.” 

(From Section “From Today to Passenger Service,” Page 35)

“Palmdale to Los Angeles Section: Scoping was initiated in March 2007. Scoping 

meetings were held in Los Angeles, Glendale, Sylmar, and Palmdale in April 2007. 

Since then, significant engineering and environmental work has been accomplished, 

including the evaluation of access into and out of Los Angeles Union Station.”

(From Section “From Today to Passenger Service,” Page 36)

“Los Angeles to Anaheim Section: Scoping was initiated in March 2007. Three scoping 

meetings were held in Los Angeles, Norwalk, and Anaheim in April 2007. Working in 

cooperation with LA MTA, significant engineering and environmental work has been 

accomplished to identify and evaluate existing and future rail passenger and freight 

operations within the section, access into and out of Los Angeles Union Station (LAUS), 

design options for connecting with the planned Anaheim Regional Transportation 

Intermodal Center (ARTIC), a possible station in Fullerton, and alternative maintenance 

facility sites near LAUS and ARTIC. The AA process and the environmental technical 

reports have been completed.”

(From Section “From Today to Passenger Service,” Page 37)

“Los Angeles to San Diego Section: Scoping was initiated in October 2009. Scoping 

meetings were held in La Jolla, San Diego, Escondido, Murrieta, Corona, Riverside, 

Monterey Park, West Covina, El Monte, and Pomona in October 2009 and also Ontario 

and San Bernardino in November 2009.” 

(From Section “From Today to Passenger Service,” Page 39)
142

“Altamont Corridor Rail Project: ... Scoping was initiated in November 2009, with 

sessions held in Livermore, Stockton, Fremont, and San Jose.”

(From Section “From Today to Passenger Service,” Page 40)

•	 AB 4x1 also states: In developing this revised business plan, the authority shall:

work in consultation with the appropriate legislative policy committees and the 

Legislative Analyst’s Office to respond to specific aspects in the plan .

Before beginning to develop this business plan document, staff from the Authority 

started by meeting with legislative staff to seek input and ideas. Through 

September and October, the team met with: 

•	 Staff of both Senate and Assembly Transportation Committees

•	 Staff of both Senate and Assembly Budget/Fiscal Committees

•	 Staff to key interested legislators and legislative leadership

•	 The Legislative Analyst’s Office

•	 The Governor’s Office

Using input from those meetings, the team assembled an outline, which was 

circulated to the legislative staff and Governor’s Office for further input and 

comments. Staff of the Authority continued to have e-mail dialogue with a number 

of legislative staff to continue to refine and gather input on the document. 
CALIFORNIA HIGH-SPEED RAIL AUTHORITY

925 L Street, Suite 1425

Sacramento, California 95814

T (916) 324-1541

F (916) 322-0827

For additional information, visit the

California High-Speed Rail Authority’s Web site at

www.cahighspeedrail.ca.gov